Parkes' Financial Institutions and Markets Assignments Page
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Course Assignments and Tentative Outline:
Week 10
March 9, 2010 Chapter 19: Insurance Companies and Pension Funds
March 11, 2010 - REVIEW FOR THE FINAL EXAM!
- Review today
- All homework returned
- Day 20 PPT - Review!
- Chapter 19: Insurance Companies and Pension Funds
- Growth and Organization of Insurance Companies
- Types of Insurance
Securities Industry and the Glass-Steagall Act - Paul Volker, do we need another Wall Between Commercial Banks and Securities Dealers?
PAST ASSIGNMENTS:
Week 9
March 2, 2009 Chapter 23: Hedging with Financial Derivatives I: Fowards and Futures
March 4, 2009 - Finish Chapter 23 and Begin Chapter 24: Hedging with Financial Derivatives II: Options and Swaps
- Bring your calculators today!! - Tutorial on Options Today - Homework assigned
- Options and Swaps Homework, Due Tuesday, March 9, 2010!
- Homework on futures markets and hedging. Hint: remember the numbers are already in 100s!
- Day 18 PPT - Credit Default Swaps Primer
- Chapter 23: Continued
- Chapter 24: Options (notice ONE PPT - One Chapter in the 6th Edition)
- Strike Price
- American versus European Options
- Option Contracts: Puts versus Calls
- Swaps and Credit Derivatives
- Credit Derivatives
- As Warren Buffet says: Are Credit Derivatives a time bomb?
January 22 - March 1, 2010 SPRING FESTIVAL - Happy New Year - NO CLASSES!!
Week 8
January 19, 2010 - Chapter 15: The Bank Firm and Bank Management
- Day 15 PPT - Bank Management
- Chapter 15: The Banking Firm and Bank Management
- Basic Operation of a Bank
- T-Account - Changes in the Balance Sheet ONLY
- Deposit Outflows and Reserves
- General Principles of Bank Management
- Liquidity Management
- Asset Management
- Liability Management
- Capital Adequacy Management - ROA Versus ROE and EM
Measuring a Bank's Performance
Operating Income
Operating Expenses
China-U.S.A. homework assigned Thursday - Article Discussed in Class:Reserve Ratio Increase Proves Surprise
January 21, 2010 - Chapter 13: Pegged Exchange Rates as well as Finish Chapter 16 and Chapter 21
- China-U.S.A. homework due Tuesday, March 2, 2010 - See Day 16 PPT
- Chapter 13: International Financial System and Monetary Policy - An Introduction
- Use the textbook instead of Mishkin Chapter 13 PPT
- Foreign Exchange Intervention and the Money Supply
- Unsterlized Intervention
- Sterilized Intervention
- For your own knowledge - not on the Final Exam
- Balance of Payments
- The Gold Standard
- Bretton Woods Fixed Exchange Rate System
- EMS
- Day 16 PPT - Assignment Due Tuesday, March 2, 2010
- Chapter 19: Insurance Companies and Pension Funds
- Growth and Organization of Insurance Companies
- Types of Insurance
Securities Industry and the Glass-Steagall Act - Paul Volker, do we need another Wall Between Commercial Banks and Securities Dealers?
Pension Funds
Week 6
January 4, 2010 Midterm Exam, Chapters 3, 4, 8, 9, 10 and 11 plus all PowerPoint Slides
- The exam will be held at 6:30 pm in Teaching Building #2 - we will begin at 6:30 so you must come early enough to find your assigned seat.
- No class on Tuesday, January 5
- Day 11 PPT - "REPOS AND REVERSE REPOS"
January 6, 2010 - Chapter 12: Foreign Exchange Markets - Long Run
Week 7
January 12, 2010 - Chapter 12: Foreign Exchange Markets - Short-Run
January 14, 2010 - Finish Chapter 12 and Chapter 15: The Bank Firm and Bank Management
- Foreign Interest Rate homework due today - See Day 13 PPT - Postponed
- Chapter 12: Foreign Exchange Markets
- Explaining Changes in Exchange Rates
- The Exchange Rate Overshooting Model
- Day 14 PPT - Bank Management
- Mishkin Chapter 15 PPT - Bank Management
- Chapter 15: The Banking Firm and Bank Management
- The Bank Balance Sheet - Know the Basic 4 Assets and 4 Liabilities!
- Basic Operation of a Bank
Week 5
December 29, 2009 Finish Chapter 10: Stocks and begin Chapter 11: Mortgages
December 31, 2009 - Finish Chapter 11: Mortgages
- Chapter 11: Mortgage Investments continued
- PMI
- Mortgage Loan Amortization
- Computing the Payment on a Mortgage
- Mishkin Pages on FF: Pages 393, 394,
395, 396, 397, 398.
Also Day 10 PPT: What are Fed Funds?
- Mortgages continued - Today's mortgage market
- Preview for the Midterm Exam on Monday, January 4, 2010 at 6:30 pm
December 25, 2009 Merry Christmas!!
Week 4
December 22, 2009 - Chapter 10: The Bond Markets
- Chapter 10: Capital Market Financial Instruments
- US Government securities: U.S. Treasuries mostly
- Capital Market Interest Rates
- Corporate bonds
- US Government Agency securities (Especially Fannie Mae and Freddie Mac - See Mortgage Chapter too!)
- State and Local Gov't
Problem Set #3 - Bond Homework
Thanks to one of our Students who found the calculators below
NOW can anyone find a CHEAPER Chinese brand of the same Business Analyst calculator? - They must have the 5 functions: FV, PV, I/Y, PMT, N.
- You may use these calculators on the exam and I will show you how to use them, if you so desire.
Day 7 PPT
Supplemental Day 7 PPT - "Call" Bond Calculations and Bankruptcy stuff
December 24, 2009 - Finish Chapter 10: Stock and Bond Discussions
- ARE YOU READY FOR THE TEST? - Some thoughts about preparation for any exam.
- Notice in Edition 5 of Mishkin's Textbook, Chapter 11: Stock Markets, is a separate chapter, therefore Chapter 11 PPT is discusses Stocks.
- Bring your calculators today!!
- Quiz today - To buy a Muni or Corporate Bond - Marginal Tax Rate consideration (MTR)
- Monday, January 4 at 6:30 pm will be the Midterm Exam!
- Day 8 PPT - Stock Calculations "Advanced"
- Chapter 10 continued - Capital Market Financial Instruments
- Notice in Edition 5 of Mishkin's Textbook, Chapter 11: Stock Markets, is a separate chapter.
Week 3
December 15, 2009 - Finish 8 and begin Chapter 9: The Money Markets
- Bring your calculators today!!
- Problem Set 2 due TODAY!
- The Loanable Funds "Framework" Revisited:
- 3 MORE Applications - 1. "The Fisher Effect," 2. Negative Savings Rates and 3. Government Budget Deficit
The "Tools" and the Affect upon the Money Supply - Notice the PPT
Day 5 PPT - "Money" Rates
Mishkin's Chapter 9 PPT - The Money Market
Mishkin's Chapter 10 PPT - The Bond Market
Chapter 9: Money Market Financial Instruments
- US Treasury Bills
- Negotiable CDs
- Commercial Paper (know those three components of this one)
December 17, 2009 - Finish Chapter 9 and Chapter 4
- Chapter 9: Money Market Financial Instruments
- US Treasury Bills
- Negotiable CDs
- Commercial Paper (know those three components of this one)
- Banker's Acceptances
- Federal Funds - Daily and Target FF rates, 2008
- The Federal Funds Market - Changed since our book - notice the "FUNKY" Supply curve in the PPT
- What are Federal Funds? A great definition question for the Mid-term exam! (See pg. 262)
- Eurodollars
- The LAST part of Chapter 4:
- Liquidity Preference "Framework:" The Supply and Demand for Money (End of Chapter 4 in our book)
- 1st note: Quantity of Assets Supplied = Quantity of Assets Demanded
- 2nd note: The interest rate is the opportunity cost of holding money - it's like the price of money
- Shifts in Demand for and Supply of MONEY
- Applications: Boom/Recession in the Economy, Price level changes, Money Supply Changes
- Compare the results for Booms/Recessions with the Loanable Funds Framework - they are equivalent!
- Higher GROWTH RATE in the Money Supply: the "Effects" Last topic in Chapter 4
Day 6 PPT
Week 2
December 8, 2009 - Finish Chapter 3 and begin Chapter 4: The Behavior of Interest Rates
- Bring your calculators today!!
- Let's do the calculations: Consol Bond and Price versus Interest Rate
- 4. Discount Bonds - U.S. Treasury Bills, for example
- Return versus interest rate - capital gains/losses
- Reinvestment Risk
Central Banks - the Fed and the PBC (People's Bank of China)
Mishkin's Chapter 4 PPT
The Theory of Asset Demand
Wealth
Expected return
Risk
Liquidity
Also the Benefits of Diversification
Money Rates - Note that data may be found in the Federal Reserve Board of Governor's website.
Only Handwritten answers, please. For Thursday, December 10, 2009 find the prime rate, near closing bid Fed Funds rate,
commercial paper rate, T-Bill rate and LIBOR rate. Hint see p. 273. (5 pts)Make sure to include the date you are quoting these numbers from (like a citation in ACAD 103 and 201)
Three Places worth looking for rates for Tuesday:
Day 3 PPT - A little on Commodities Markets
The Loanable Funds "Framework"
Notice the y-t-m (interest rate) IS the expected return!
Key also is that "The interest rate is the inverse of the Price of a Bond"
Look at BOTH graphs - The Bond Market, which is the inverse of the Loanable Funds Market
"Shifts"
- Demand, know the Theory of Asset Demand
- Supply, Booms/Recessions, Expected Inflation and Government Activities
4 Applications - 1. "The Fisher Effect," 2. Business Cycles, 3. Negative Savings Rates and 4. Government Budget Deficit
Credit Markets and the Yield Curve
Day 3a PPT - CPI, IP, and many other notes!
Problem Set 2 - assigned today - "Interest rate calculations" Due on December 15, 2009
Treasury Issues for Problem Set 2
Only Handwritten answers, please. For Tuesday, December 15, 2009 find the current 10 yr. U.S. Treasury Note rate, 30 yr. U.S. Treasury Bond rate,
average corporate bond AAA and BBB rates (see p. 293), and the a recent municipal bond rate. (5 pts)
December 10, 2009 - Finish Chapter 4 and begin Chapter 8: The Fed, Economic Indicators and Markets
- Bring your calculators today!!
- Quiz today - calculate some growth rates!
- Problem Set 2 due next class - TUTORIAL AT THE BEGINNING OF CLASS TODAY!
- Chapter 8: The Fed
- Mishkin's Chapter 8 PPT
- The Fed's Balance Sheet
- Open Market Operations versus Discount lending - how does each affect the balance sheet
- The "Tools" and the Affect upon the Money Supply - Notice the PPT
- Tools of the Central Bank: Open Market Operations (Buying and Selling Bonds), Discount Rate, Required Reserve Rate
- Supplemental Day 4a PPT - Problem Set 2 Thoughts
- Chapter 8 continued - The Fed tools...
- Tools of the Central Bank: Open Market Operations (Buying and Selling Bonds), Discount Rate, Required Reserve Rate
- The Fed: Goals and Targets - we will talk about the Central Bank ALL term, but one last topic at the end of Chapter 8
- Day 4 PPT - The Fed Tools in brief!
Week 1
December 1, 2009 - An Introduction and begin Chapter 3: Understanding Interest Rates
- An Introduction to Financial Institutions and Markets
- Chapter 1: Very Briefly, Financial Markets
- Mishkin's Chapter 1 PPT READING - FYI *(For Your Information)*!
- Debt Markets and Interest Rates (SHIBOR?!)
- Graph - T-Bills versus US Gov't Bonds versus Corporate Bonds - what's the difference? Page 5
- "The interest Rate" - notice that (mostly) all interest rates track together
- Stock Markets
- Foreign Exchange Markets
- The Yuan Now Pegged to the Dollar again!?!
- Mishkin's Chapter 3 PPT
- QUIZ - the 3 Goals of any MACROECONOMY! and 3 indicators!
- Problem Set I - AVAILABLE HERE!
NO TYPING! The Homework is due Thursday, December 3, 2009 at the beginning of class for 15 points.
Central Banks - the Fed and the PBC (People's Bank of China)
The Money Supply and Financial Intermediaries
Day 1 PPT - An Introduction
December 3, 2009 - Chapter 3: Understanding Interest Rates (continued)
- Problem Set 1 due today! After I collect them, the assignments are late and 3 points will be subtracted. NO TYPING!
- What is a price index and how do we calculate them? CPI, GDP deflator
- Growth rates (inflation rate) will also be calculated.
- Bring your calculators today!!
- What is the value of any index at the base year?
- Mishkin's Chapter 2 PPT - For Review and Reading
- Growth rates (inflation rate) will also be calculated.
- Real versus Nominal Wage rates
- Some key concepts from your reading of Chapter 2: (See PPT)
- Primary and Secondary Markets
- Adverse Selection and Moral Hazard
- Transaction Costs and Economies of Scale
- A Bank's Liabilities - IOUs (What's an IOU?) What is money?
- Let's do the calculations:
- Simple Present Value
- Simple Loan
- 1. Simple Present Value of a Future Amount
- 2. Fixed Payment Loans - Yield-to-Maturity
- 3. Coupon Bond Calculations - VERY IMPORTANT!!
Day 2 PPT - Basic information about Chapter 2 - read Chapter 2 on your own! REQUIRED!~
[Andrew's SILC Home
Page, Shanghai, China] - [Drew's Home Page, United States]
email: andrew at andrewparkes.com
Last Update: December 1, 2009
By Andrew L. H. Parkes, Ph. D.