The primary objective of this chapter is to describe the various financial instruments
traded in the mortgage markets.
A second objective is to describe the key role played by the U.S. government in the
This chapter continues our review of the fixed-income financial markets, and analyzes
the debt securities of the capital market. In the last chapter we studied the money market, a collection of
markets where sh
1. (T) If interest rates are higher in Japan than in the United States, the cost of a yen per U.S. dollar
in the spot market will be higher than in the forward market.
2. (F) A country's forward exchange rate will increase
1. (T) Mortgage insurance was an important factor in the development of secondary mortgage
2. (T) Commercial banks are the largest institutional investor in mortgages.
3. (T) FNMA is a privately owned corporation wi
Many diverse institutions borrow in the money markets, while relatively few invest.
All money market instruments are short-term debt.
Treasury bills are sold on a discount basis, with interest paid separ
Productivity = 0.5 units/hour, 8 hours/day, 60 days/season
Labor RT = $5 per hour, OT = $8 per hour
RT cost = $5 oer 0.5 units = $10 oer uni
OT cost = $8 per 0.5 units = $16 per unit
Inventory holding = $5 per unit per quarter, Backorder = $10 per unit
Richard T. Law
(Pictured left to right)
Richard Law: Junior,
Kelsey Wallace: Junior,
Bailey Fulton: Senior,
Roman May: Junior,
1. (T) Investment banking operations occur in the direct financial market.
2. (F) The Glass-Steagall Act of 1933 has eliminated banks from any underwriting activities.
3. (F) The Glass-Steagall Act of 1933 allowed firms eng
THE STRUCTURE OF INTEREST RATES
1. This chapter's purpose is to introduce students to the structure of interest rates; that is,
explain why large numbers of different interest rates coexist in financial markets on
ASEAN Internship for University Students of Hong Kong Scheme
List of host organizations with HKUST interns in the past
Name of Host Organization
Canadia Bank Plc.
Cathay Pacific Airways