Financial Institutions – savvyessaywriters.net | Savvy Essay Writers
Financial Institutions – savvyessaywriters.net | Savvy Essay Writers
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Assignment ContentComplete the following textbook problems:Ch. 6, p.158, # 1. Primary Market Explain how the Treasury uses the primary market to obtain adequate funding.Ch. 6, p.158, # 4. Commercial Paper Who issues commercial paper? What types of financial institutions issue commercial paper? Why do some firms create a department that can directly place commercial paper? What criteria affect the decision to create such a department?Ch. 6, p.158, # 8. Repurchase Agreements Based on what you know about repurchase agreements, would you expect them to have a lower or higher annualized yield than commercial paper? Why?Ch. 6, p.158, # 9. Banker’s Acceptances Explain how each of the following would use banker’s acceptances: (a) exporting firms, (b) importing firms, (c) commercial banks, and (d) investors.Ch. 7, p.184, #10. Global Interaction of Bond Yields If bond yields in Japan rise, how might U.S. bond yields be affected? Why?Ch. 7, p.184, #11. Impact of Credit Crisis on Junk Bonds Explain how the credit crisis affected the default rates of junk bonds and the risk premiums offered on newly issued junk bonds.Ch. 9, p.241, #2. Mortgage Rates and Risk What is the general relationship between mortgage rates and long-term government security rates? Explain how mortgage lenders can be affected by interest rate movements. Also explain how they can insulate against interest rate movements.Ch. 9, p.241, #4. Mortgage Maturities Why is the 15-year mortgage attractive to homeowners? Is the interest rate risk to the financial institution higher for a 15-year or a 30- year mortgage? Why?