; REVIEW FOR FINANCIAL MARKETS AND INSTITUTIONS FINAL EXAM Summer
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REVIEW FOR FINANCIAL MARKETS AND INSTITUTIONS FINAL EXAM Summer

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									REVIEW FOR FINANCIAL MARKETS AND INSTITUTIONS FINAL EXAM: Fall Semester >03

FUTURES
Review futures problem in text or last quiz

ROLE OF FEDERAL RESERVE
1. Monetary policy tools
        -deposit/reserve multiplier effect
        -impact of velocity on Fed decisions
2. Impact of Federal Reserve actions to commercial bank's balance sheet
3. General idea of impact on bank lending through changes in open market ops, reserve req, disc. rate

MONEY MARKET
1. General idea of clearinghouse and federal funds
        - understand contemporaneous reserve accounting process & Wednesday bank settlement process
2. T-bill, C.D., Commercial Paper, Prime Rate, Discount Rate
        - understand what each is
        - rate relationship between the instruments
3. Banker's Acceptance and Eurodollar
        - understand the process in creating these accounts

INSTITUTIONS
1. Capital and reserve requirement computations for a Federal Reserve member institution
2. Balance sheet overview of GAP management for commercial banks, thrifts, and credit unions
        - determine profit/loss based on interest rate changes
        - interest rate impact on institutions due to interest rate GAP
        -mortgage problem should interest rates rise
          - ARM vs. Fixed-rate mortgage
          - rationale for selecting ARM over Fixed.
3. Life insurance companies
        - investment practices from a balance sheet perspective
        - life insurance contracts (ex: difference between term and whole life, etc)
4. Pension funds
        - investment portfolio of private and public funds
        - nature of defined benefit vs. defined contribution, vesting, under/over funded
        - E.R.I.S.A.
4. Investment companies and N.A.V.
5. Commercial Banking and Savings & Loan legislation (if covered on last day of class: notes only)

AGENCY SECURITIES
1. Concept of securitization
2. Meaning of a Pass-Through (Ginnie Mae, Fannie Mae, Freddie Mac)
       - features and differences from a bond
       - purpose of each agency when established

INTERNATIONAL
1. Balance of Payments
        -Current, Cap., Basic and Reserve Acct.
2. Fixed and floating standard for exchange
        -central bank's role under each system
        - interest rate parity
3. Calculating exchange rates
        - idea of currency cross rates
        -quoting forward rates
        - basic hedging with exchange rates

								
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