BACK TO THE FUTURE FOR THE FED
... that the Fed had surrendered control of its balance sheet and the money supply because it might have to purchase potentially unlimited amounts of Treasury debt in order to implement the rate cap. Such asset purchases had inflationary potential, but inflation was managed separately through wartime pr ...
... that the Fed had surrendered control of its balance sheet and the money supply because it might have to purchase potentially unlimited amounts of Treasury debt in order to implement the rate cap. Such asset purchases had inflationary potential, but inflation was managed separately through wartime pr ...
money_lecs_2_2013_v3_post
... Expectations theory says that short rates are expected to rise in coming years. Note that this can explain why Fed makes statement about future rates (look back at Fed statement.) ...
... Expectations theory says that short rates are expected to rise in coming years. Note that this can explain why Fed makes statement about future rates (look back at Fed statement.) ...
Determinants of Interest Rates
... 4.2 You have just won $10 million , $1 every year for the next 10 years. Discuss. 4.6 What is the yield to maturity of a $1,000 face value discount bond that matures in 1 year and sells for $800? What if it matured in 2 years? 4.9 Which $1000 face value bond currently selling for $800 has higher y-t ...
... 4.2 You have just won $10 million , $1 every year for the next 10 years. Discuss. 4.6 What is the yield to maturity of a $1,000 face value discount bond that matures in 1 year and sells for $800? What if it matured in 2 years? 4.9 Which $1000 face value bond currently selling for $800 has higher y-t ...
Why Are Long-Term Interest Rates So Low?
... term premium appears likely to continue for several more years. Developments abroad have also affected the U.S. term premium. During times of increased global uncertainty and financial market volatility, foreign investors often prefer U.S. Treasury securities as a safe haven, pushing up their prices ...
... term premium appears likely to continue for several more years. Developments abroad have also affected the U.S. term premium. During times of increased global uncertainty and financial market volatility, foreign investors often prefer U.S. Treasury securities as a safe haven, pushing up their prices ...
Lecture 3b Ch 11 Mortgage Markets
... Mortgage loan contracts contain many legal terms that need to be understood. Most protect the lender from financial loss. • PMI: insurance against default by the borrower • Qualifications: includes credit history, employment history, etc., to determine the borrowers ability to repay the mortgage as ...
... Mortgage loan contracts contain many legal terms that need to be understood. Most protect the lender from financial loss. • PMI: insurance against default by the borrower • Qualifications: includes credit history, employment history, etc., to determine the borrowers ability to repay the mortgage as ...
Prices and Exchange Rates In frictionless markets
... Money is borrowed from countries with low interest rates and invested in countries with high interest rates, without covering with a forward contract. Expected profits calculated using expected spot rates: foreign exchange risk. Example: The “yen carry trade” Borrow yen at extremely low interest rat ...
... Money is borrowed from countries with low interest rates and invested in countries with high interest rates, without covering with a forward contract. Expected profits calculated using expected spot rates: foreign exchange risk. Example: The “yen carry trade” Borrow yen at extremely low interest rat ...
Mortgage backed securities
... different classes of CMO interests, known as tranches, according to a complicated deal structure. Each tranche may have different principal balances, coupon rates, prepayment risks, and maturity dates (ranging from a few months to twenty years). CMOs are often highly sensitive to changes in interest ...
... different classes of CMO interests, known as tranches, according to a complicated deal structure. Each tranche may have different principal balances, coupon rates, prepayment risks, and maturity dates (ranging from a few months to twenty years). CMOs are often highly sensitive to changes in interest ...
