Problem Set 1 Assignment

Problem Set 1 Assignment - (a) Negotiable Certificates of...

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Economics 330 – Money and Banking Problem Set No. 1 Fall 2010 Dr. Neri Due within the first 5 minutes of lecture on Wednesday September 8. Late submissions will not be accepted. Please type or do in ink. I. Using your own words, describe each of the following financial instruments, including the type of claim (debt/equity), maturity(money or capital market), risk(high/low), and liquidity characteristics(high/low), and any other distinguishing characteristics. Identify a type of financial institution or other participant in the financial market (individuals, government, business) that are most likely to borrow using these instruments, and a type of institution or other participant that are most likely to lend using these instruments. You will need to use Chapter 2. The following tale may be helpful to organize your thoughts.
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Unformatted text preview: (a) Negotiable Certificates of Deposit (b) Municipal Bonds (c) Repurchase Agreements (d) Commercial Paper (e) Residential Mortgages (f) Federal Funds (g) Corporate Bonds Type of Claim Maturity Risk Liquidity Borrower Lender Negotiable Certificate of Deposit Municipal Bonds Repurchase Agreement Commercial Paper Residential Mortgages Federal Funds Corporate Bonds II. Using your own words, describe each of the following financial institutions: What sorts of assets does it hold? What sort of liabilities does it issue? What functions does it serve in the financial system? You will need to use chapter 2 and 13. (a) Savings and Loans (b) Commercial Banks (c) Money Market Mutual Funds (d) Property and Casualty Insurance Companies (e) Pension Funds...
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Problem Set 1 Assignment - (a) Negotiable Certificates of...

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