Questions from Financial Markets

Q: How does high credit risk affect the yield on securities?

How does high credit risk affect the yield on securities?

Q: What is the meaning of the forward rate in the context of

What is the meaning of the forward rate in the context of the term structure of interest rates? Why might forward rates consistently overestimate future interest rates? How could such a bias be avoide...

Q: Explain why a credit crisis in one country may be transmitted to

Explain why a credit crisis in one country may be transmitted to other countries.

Q: Explain how consideration of a liquidity premium affects the estimate of a

Explain how consideration of a liquidity premium affects the estimate of a forward interest rate.

Q: Distinguish between primary and secondary markets. Distinguish between money and capital

Distinguish between primary and secondary markets. Distinguish between money and capital markets.

Q: Do you think that large financial institutions should have been rescued by

Do you think that large financial institutions should have been rescued by the Fed during the credit crisis?

Q: Explain how the Fed's monetary policy affects the unemployment level.

Explain how the Fed's monetary policy affects the unemployment level.

Q: Explain how the Fed's monetary policy may indirectly affect the prices of

Explain how the Fed's monetary policy may indirectly affect the prices of equity securities.

Q: How might the FOMC statement (issued following the committee's meeting)

How might the FOMC statement (issued following the committee's meeting) stabilize financial markets more than if no statement were provided?

Q: As a result of the Financial Reform Act of 2010, the

As a result of the Financial Reform Act of 2010, the Consumer Financial Protection Bureau was established, and housed within the Federal Reserve. Explain the role of this bureau.