Questions from Financial Markets

Q: In periods when home prices declined substantially, some homeowners blamed the

In periods when home prices declined substantially, some homeowners blamed the Fed. In other periods when home prices increased, homeowners gave credit to the Fed. How can the Fed have such a large im...

Q: Consider the prevailing conditions for inflation (including oil prices), the

Consider the prevailing conditions for inflation (including oil prices), the economy, interest rates, and any other factors that could affect exchange rates. Based on prevailing conditions, do you thi...

Q: What are the consequences to a government in the Euroone when it

What are the consequences to a government in the Euroone when it obtains credit from the ECB?

Q: Consider the prevailing conditions that could affect the demand for stocks,

Consider the prevailing conditions that could affect the demand for stocks, including inflation, the economy, the budget deficit, and the Fed’s monetary policy, political conditions, and the general m...

Q: In recent years, private equity funds have grown substantially. Will

In recent years, private equity funds have grown substantially. Will the creation of private equity funds increase the semi-strong form of market efficiency in the stock market? Explain.

Q: Now assume that the bank wants to determine how its forecasted return

Now assume that the bank wants to determine how its forecasted return on equity (ROE) next year would be affected by boosting its capital from $1 billion to $1.2 billion. (The extra capital would not...

Q: The bank is considering a strategy of attempting to attract an extra

The bank is considering a strategy of attempting to attract an extra $1 billion in funds in the form of one-year negotiable certificates of deposit, which will replace $1 billion of five-year NCDs. De...

Q: Is the bank’s ROA likely to be higher next year if it

Is the bank’s ROA likely to be higher next year if it uses this strategy of attracting more one-year NCDs?

Q: What would be an obvious concern about a strategy of using more

What would be an obvious concern about a strategy of using more one-year NCDs and fewer five-year NCDs beyond the next year?

Q: The bank is considering a strategy of using $1 billion to

The bank is considering a strategy of using $1 billion to offer additional loans to small businesses instead of purchasing T-bills. Using all the original assumptions provided, determine the probabili...