2022年2022年金融市场期末复习 .pdf

期末复习名词解释1. Fisher effect: this relationship between interest rates and expected inflation is often referred to as the fisher effect 2. Surplus units: financial market participants provide funds are called surplus units. 3. mutual funds : mutual funds sell shares to surplus units and use the funds received to purchase a portfolio of securities. 4. circuit breakers:are now used to temporarily halt the trading of some securities or contracts. 5. IPO : initial public offering is a first-time offering of shares by a specific firm to the public 6. money markets : this financial market facilitate the flow of short-term funds.(less than one year) 7. derivative securities:are financial contracts whose values are derived from the values of underlying assets. 8. federal funds:the federal funds market allows depository institutions especially for interbanks to effectively lend or borrow short-term funds from each other. 9. call feature : If a security offers any special provision to investors, its yield may be influenced. One type of provision, called a call feature 10. yield to maturity : the issuers cost of financing with bonds is commonly measured by the so-called yield to maturity 11.Nasdaq : National Association of Securities Dealers Automated Quotations, Which is an electronic quotation system that provides immediate price quotations. 12. crowding out effect: the federal government may be willing to pay whatever is necessary to borrow these funds, but the private sector may not. 13.short sale : sale of securities or commodity futures not owned by the seller (who hopes to buy them back later at a lower price) 14.convertibility clause : another special provision of bonds that can affect the yield is a convertibility clause , which allows investors may require extra compensation to purchase the bonds. 15. repurchase agreements : one party sells securities to another with an agreement 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 1 页，共 4 页 - - - - - - - - - to repurchase the securities the securities at a specified date and price. 16.p/e ratio :it represents its prevailing stock price per share divided by the earnings per share generated over the last year.17. effective yield : it is dependent on the yield earned on the money market security in the foreign currency and the exchange rate effect. 18.NCDs : negotiable certificates of deposit are issued by large commercial banks and other depository institution as short-term source of funds. 19.captical markets : this financial market facilitate the flow of long-term funds .(more than one year) 20. discount rate : the rate of interest set by the Federal Reserve that member banks are charged when they borrow money through the Federal Reserve System 简答题1.Is the price of a long-term bond more or less sensitive to a change in interest rates than the price of a short-term security? Why? More sensitive; because the long-term bonds will continue to offer the same coupon rate over a longer period of time than the short-term bonds .of course , if interest rates increase , prices of the long-term bonds will decline by a greater degree. 2.Assume that bond yield in japan rise. How might U.S. bond yields be affected? Why? ANSWER: If bond yields rise in Japan, there may be an increased flow of funds to purchase these bonds. This reduces the amount of funds available to purchase U.S. bonds. Consequently, U.S. bonds will sell at lower prices than before, implying higher yields than before. 3.How is money supply growth affected by an increase in the reserve requirement ratio? A higher reserve requirement ratio cause an initial injection funds to multiply by a smaller amount . conversely , a lower reserve requirement ratio cause it to multiply by a greater amount . 4.If the federal government planned to expand the space program, how might this affect the interest rates? 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 2 页，共 4 页 - - - - - - - - - ANSWER: An expanded space program would (a) force the federal government to increase its budget deficit, (b) possibly force any firms involved in facilitating the program to borrow more funds. Consequently, there is a greater demand for loanable funds. The additional spending could cause higher income and additional saving. Yet, this impact is not likely to be as great. The likely overall impact would therefore be upward pressure on interest rates. 5.Who issues the commercial paper? Please list the characters of the commercial paper It is issued only by well-known creditworthy firms and is typically unsecured . a short-term debt , large amount . 6.Would yields be higher for callable bonds or noncallable bonds that are similar in all other respects? Why? ANSWER: Yields are higher for callable bonds than noncallable bonds because the call feature allows the issuer to retrieve bonds from investors. The issuer must offer a higher yield on callable bonds to compensate investors 7.If a bonds coupon rate is above its required rate of return, will its price above or below its par value? Explain. ANSWER: When a bonds coupon rate is above the required rate of return, the price of the bond would be above its par value because the coupons provide more than the return required. 8.Base on what you know about repurchase agreements, would you expect them to have a lower or higher annualized yield than commercial paper? Why? ANSWER: Repurchase agreements with a similar maturity as commercial paper would likely have a slightly lower yield, since they are typically backed by Treasury securities. 9.Explain why the stock price of a firm may rise when the firm announces that it is repurchasing its shares. ANSWER: A stock repurchase signals to other investors that the firms managers believe the stock is undervalued. Therefore, they purchase the stock, which places upward pressure on the stocks price10. Should increasing money supply growth place upward or downward pressure on interest rates? Justify your answer with the graph. ANSWER: If one believes that higher money supply growth will not cause inflationary expectations, the additional supply of funds places downward pressure on interest rates. However, if one believes that inflation expectations do erupt 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 3 页，共 4 页 - - - - - - - - - as a result, demand for loanable funds will also increase, and interest rates could increase (if the increase in demand more than offsets the increase in supply). 11. Whats the fisher effect? Please write down the formula of this effect. This relationship between intere rates and expected inflation is often referred to as the Fisher effecr. i=E(INF)+iR 12. Why do firms engage in IPOs? As a privately held firm expands, it may need more funds than it can obtain through borrowing and therefore will consider IPO. It will save the transaction costs, 13. Why can expectations of an acquisition affect the value of the targets stock?(p283) The expected acquisition of a firm typically results in an increased demand for the targets stock and therefore raises the stock price. 14. Classify the types of financial institutions mentioned in our book as either depository or nondepository.(p11) Depository: Commercial Banks. Savings Institutions. Credit Unions Nondepository: Finance Companies. Mutual Funds. Securities Firms. Insurance Companies Pension Funds. 15. explain why interest rates tend to decrease during recessionary periods ANSWER: During a recession, firms and consumers reduce their amount of borrowing. The demand for loanable funds decreases and interest rates decrease as a result. 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 4 页，共 4 页 - - - - - - - - -