351 winter2011 final long soln

351 winter2011 final long soln - Exam Name_

Info iconThis preview shows pages 1–18. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam Name___________________________________   SHORT ANSWER.  Write the word or phrase that best completes each statement or answers the question. 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
 
Background image of page 2
1)   ______ _______   
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
What are  the main  items in a  bank's  asset side  of the  balance  sheet?  discuss  them  briefly. 
Background image of page 4
2)   ______ _______   
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Your  bank has  the  following  balance  sheet Assets Liabilities         Rate - sensitive $100  million Rate - sensitive $75  million Fixed - rate 100  million Fixed - rate 125  million What  would  happen to  bank  profits if  the  interest  rates in  the  economy  go down?  Is there  anything  that you  could do  to keep  your bank  from  being so  vulnerabl e to  interest  rate  movemen ts?  
Background image of page 6
3)   ______ _______   
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Explain  why the  bank rate  is an  upper  limit for  the  overnight  rate. 
Background image of page 8
4)   ______ _______   
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Explain  why the  bank rate  minus 50  basis  points (i b - 50) is the  lower  limit for  the  overnight  rate. 
Background image of page 10
5)   ______ _______   
Background image of page 11

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Provide  an  explanatio n of the  exchange  rate  overshoot ing  phenomen on. 
Background image of page 12
6)   ______ _______   
Background image of page 13

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Why are  exchange  rates so  volatile? 
Background image of page 14
7)   ______ _______   
Background image of page 15

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Explain  and  demonstra te  graphicall y how an  unsterilize purchase  of foreign  assets  leads to  overshoot ing of the  exchange  rate, and  describe  the long - run  behavior  of the  exchange  rate,  everythin g else  held  constant. 
Background image of page 16
8)   ______ _______  1. Given the most recent financial crises (2007‐2009), list the new regulations that are being proposed that would help prevent this from happening again.
Background image of page 17

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 18
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/29/2011 for the course ECO 349 taught by Professor H during the Summer '09 term at University of Toronto- Toronto.

Page1 / 22

351 winter2011 final long soln - Exam Name_

This preview shows document pages 1 - 18. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online