A discount bond has a coupon rate that is less that the bonds yield to maturity. The breakdown of U.S. Gross Domestic product into its major categories is usually as: Personal consumption‚ government purchases‚ gross private domestic investment‚ net exports. Major leading indicators: Money supply M2‚ consumer expectations‚ and stock prices S&P500 All are goals of monetary policy except: Stable prices‚ business stability‚ sustained economic growth‚ but NOT a balance in domestic payments. Fiscal
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2 Explain the role of brokers‚ dealers‚ and investment bankers. How does each make a profit? Brokers never own the securities that they trade. Brokers bring buyers and sellers together and receive a commission if the sale takes place. Dealers on the other hand create a market for securities by owning an inventory of securities. Dealers make profits by trading from their inventory and dealing as a matchmaker. Investment Bankers help firms bring their debt or equity securities to market. They
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a) The coupon savings on Build America Bonds (BAB) comes from the initial function of the Bonds‚ on average‚ 84 basis points on interest costs for 30-year bonds and also received significant savings on shorter maturities‚ as compared to traditional tax-exempt bonds. While‚ in this case‚ the State of Maine issue BABs‚ and the Treasury provides a 35 percent direct subsidy to State of Maine to offset its borrowing costs. b) The purpose of Build America Bonds is to reduce the cost of borrowing for
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Hello Sandeep‚ sorry I couldn’t make it there yesterday‚ but I was not feeling well. For Monday: read Act 2 of Othello answer the study questions for Act 1 (they start with # 11‚ I don’t know why!) We’ll look at the Act 2 questions during class Art: draw 2 faces following the instructions on this webpage: http://www.wikihow.com/Draw-a-Face it’s a lot like the other website‚ but also a little different‚ so you’ll get some different ideas on how to do this. STUDY QUESTIONS FOR
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etc) Capital market debt: long term bonds‚ can be safe or risky (Treasury bonds‚ municipal bonds‚ corporate bonds‚ etc) Bond ratings: in terms of default risk‚ from very safe to junk Common Stock and Derivatives Common Stock is equity or ownership in a corporation. Derivatives 1-5 Payments to stockholders are not fixed‚ but depend on the success of the firm Value derives from prices of other securities such as stocks and bonds Used to transfer risk (hedge)
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negotiable CD’s‚ money market funds and Eurodollar deposits. Capital Markets: The markets for long-term debt (corporate‚ state‚ local and federal government) and corporate stock (common and preferred). U.S. Treasury notes and bonds‚ municipal bonds‚ mortgages‚ corporate bonds‚ preferred stock and common stock. Primary Markets: The first buyer of a newly issued security buys that security in the primary market. All subsequent trading of those securities is done in the secondary
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Executive Summary Main differences of Zeus from its main competitor are its customer-oriented services‚ their core strategy of teamwork and they used municipal bond fund to purchase securities. Estimation of risk-adjusted returns is important to Zeus as In Zeus opinion‚ investors will not pay for the higher return generated by merely taking the higher risk. Investors demand Zeus to utilise professional skills to provide them with a return above the benchmark. There are also advantages and disadvantages
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Investment Banking and Investment Research. Goldman also was lead advisor on the Ford Motor Company’s IPO in 1956‚ which at the time was a major deal on Wall Street. During Weinberg’s time‚ he also started an Investment Research division and a Municipal Bond department. It also was at this time that the firm became an early innovator in Risk Arbitrage. Risk Arbitage‚ or sometimes called merger arbitrage‚ is an investment or trading strategy often associated with hedge funds. Hedge Funds playing a
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___________________________________ 1. Carter Corporation has some money to invest‚ and its treasurer is choosing between City of Chicago municipal bonds and U.S. Treasury bonds. Both have the same maturity‚ and they are equally risky and liquid. If Treasury bonds yield 6 percent‚ and Carter’s marginal income tax rate is 40 percent‚ what yield on the Chicago municipal bonds would make Carter’s treasurer indifferent between the two? A. 2.40% B. 3.60% C. 4.50% D. 5.25% E. 6.00% 2. Managers can
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income is added to gross interest received d. a. and b. e. a. and c. Answer: d 6. An example of a contra-asset account is: a. the loan and lease loss allowance. b. unearned income. c. buildings and equipment. d. revenue bonds. e. the provision for loan loss. Answer: a 7. Which of the following bank assets is the most liquid? a. Long-term investments b. Short-term investments c. Loans d. Demand deposits e. Unearned income Answer: b 8.
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