Parkes' Financial Institutions and Markets Assignments Page
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Course Assignments and Tentative Outline:
Week 10
November 10, 2009 Finish Chapter 24 and Begin Chapter 19: Insurance Companies and Pension Funds
November 12, 2009 - REVIEW FOR THE FINAL EXAM!
- Review today
- All homework returned
- Day 18 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?
November 15, 2009 - Special Sunday Class - Anyone may come!
- Again a quiz will be given for all interns and we will work on material covered in class during the previous week. Bring any questions, problems sets, and thoughts you have!
- Room 201, Wen Hui Building at 3 pm.
Week 11
November 20, 2009 THE FINAL EXAM! at 8:15 am
PAST ASSIGNMENTS:
Week 9
November 3, 2009 Chapter 23: Hedgeing with Financial Derivatives I: Fowards and Futures
November 5, 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, Nov. 10, 2009!
- Homework on futures markets and hedging. Hint: remember the numbers are already in 100s!
- Day 16 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?
November 8, 2009 - NO Special Sunday Class - I am on a Trip to Xiamen
- I will return on Sunday night so there is no Sunday class this week!
Week 8
October 27, 2009 Finish Chapter 12
Day 13 PPT - Using Import Prices to control inflation
Exchange Rates in the Short-Run
Equilibrium in the Foreign Exchange Market
Expected Returns - Domestic versus Foreign
The Interest Parity Condition
Equilibrium in the Foreign Exchange Market
Explaining Changes in Exchange Rates
October 29, 2009 - Chapter 15: The Bank Firm and Bank Management
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
November 1, 2009 - Special Sunday Class - Required for Internship students!
- Again a quiz will be given for all interns and we will work on material covered in class during the previous week. Bring any questions, problems sets, and thoughts you have!
- Room 201, Wen Hui Building at 3 pm.
Week 7
October 20, 2009 Chapter 11: Mortgage Investments continued
- Characteristics of the Residential Mortgage
- Mortgage interest rates
- Points
- PMI
- Mortgage Loan Amortization
- Computing the Payment on a Mortgage
Mortgages continued - Today's mortgage market
October 22, 2009 - Chapter 12: Foreign Exchange Markets
Paul Volker article
Zhou Xiaochuan says loose policy may change soon.
October 25, 2009 - Special Sunday Class - Required for Internship students!
- Again a quiz will be given for all interns and we will work on material covered in class during the previous weeks. Bring any questions, problems sets, and thoughts you have!
- Room 201, Wen Hui Building at 3 pm.
Week 6
October 12, 2009 Midterm Exam, Chapters 3, 4, 8, 9 and 10 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.
- Day 9
October 15, 2009 - Chapter 11: Mortgage Investments
- Bring your calculators today!!
- Mortgage "Points" quiz!
- Mortgages - Today's mortgage market
October 18, 2009 - Special Sunday Class - Required for Internship students!
- A quiz will be given for all interns and we will work on material covered in class during the previous weeks. Bring any questions, problems sets, and thoughts you have!
- Room 201, Wen Hui Building at 3 pm.
Week 5
October 10, 2009 Finish Chapter 10: Stock and Bond Discussions
October 11, 2009 - Special Sunday Class - Required for Internship students!
- A quiz will be given for all interns and we will work on material covered in class during the previous weeks. Bring any questions, problems sets, and thoughts you have!
- Room 301, Wen Hui Building at 3 pm.
October 1 - 8, 2009 Happy 60th Anniversary of the People's Republic of China
- NO CLASSES UNTIL SATURDAY, OCTOBER 10, 2009
Week 4
September 29, 2009 Chapter 10: Bond Markets (and Begin Chapter 11: PPT - Stocks)
- ARE YOU READY FOR THE TEST? - Some thoughts about preparation for any exam.
- Problem Set 3 due at the beginning of class today!
- 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)
- Day 7 PPT
- Supplemental Day 7 PPT - "Call" Bond Calculations and Bankruptcy stuff
- 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
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.
Week 3
September 22, 2009 - Finish 8 and begin Chapter 9: The Money 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 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)
- 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 5 PPT - Bond Calculations (See Problem Set 2 below)
- 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
- Problem Set #3 - Bond Homework
- Day 5 PPT
September 24, 2009 - Finish Chapter 9, Chapter 4 and Begin Chapter 10: The Bond Markets
Week 2
September 15, 2009 - Finish Chapter 3 and begin Chapter 4: The Behavior of Interest Rates
- Bring your calculators today!!
- Problem Set 1 due today! After I collect them, the assignments are late and 3 points will be subtracted.
- Let's do the calculations:
- A Bank's Liabilities - IOUs (What's an IOU?) What is money?
- 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.
For Thursday, September 17, 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
A News Article about Norman Borlaug, who received the 1970 Nobel Peace Prize
September 17, 2009 - Finish Chapter 4 and begin Chapter 8: The Fed, Economic Indicators and Markets
- Class on Sunday is required for those who have an internship, for others the class is optional.
The class will be in "open" format. Therefore, you can ask questions and we will talk about what YOU wish. Quiz for those with Internships at 3:00 pm in Room 301 Wen Hui Building.
- Bring your calculators today!!
- Quiz today - calculate an inflation rate!
- 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 4 PPT - CPI, IP, and many other notes!
CPI News Report from the New York Times - Table A from the BLS - All Goods Annual Changes too.
Problem Set 2 - assigned today - "Interest rate calculations" Due on September 24, 2009
Treasury Issues for Problem Set 2
For Tuesday, September 22, 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)
Make sure to include the date you are quoting these numbers from (like a citation in ACAD 103 and 201) AND do NOT use Inflation Indexed Bonds!
Also note at the side here on Investopedia - Mortgage Rates
September 20, 2009 - Special Sunday Class - Required for Internship students!
- A quiz will be given for all interns and we will work on material covered in class during the previous week. Bring any questions, problems sets, and thoughts you have!
- Room 301, Wen Hui Building at 3 pm.
Week 1
September 7, 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
- Central Banks - the Fed and the PBC (People's Bank of China)
- The Money Supply and Financial Intermediaries
- Day 1 PPT - An Introduction
>September 10, 2009 - Chapter 3: Understanding Interest Rates (continued)
- QUIZ - the 3 Goals of any MACROECONOMY! and 3 indicators!
- Problem Set I - AVAILABLE HERE! The Homework is due Tuesday, September 15, 2009 at the beginning of class for 15 points.
- 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
Let's do the calculations:
- Simple Present Value
- Simple Loan
- Simple Present Value of a Future Amount
- Fixed Payment Loans - Yield-to-Maturity
- Coupon Bond Calculations - Consol Rate VERY IMPORTANT!!
Day 2 PPT - Basic information about Chapter 2 - read on your own! REQUIRED!~
[Andrew's SILC Home
Page, Shanghai, China] - [Drew's Home Page, United States]
email: andrew at andrewparkes.com
Last Update: September 25, 2009
By Andrew L. H. Parkes, Ph. D.
At the FED - Commercial Paper rates!