Evidence from business cycle fluctuations in the US indicates that recessions have been preceded
by a decline in the growth rate of money.
US national debt reflects all the accumulated federal budget deficits and surpluses from George
Washington to George
Information and Financial Market Efficiency
E305 Chapter 1
WHY STUDY FINANCIAL MARKETS?
The Bond Market and Interest Rates
Security (financial instrument) claim on issuers future income/assets
Bond (debt security) promises to make payment periodically for a specific period of
Bond market ena
What are the four rewards to role accumulation, according to Sieber?
The four rewards to role accumulation are: privileges, resources manipulable for further status
enhancement, a sense of general status security , and ego-gratification (feelings of pe
E305 Chapter 4 Quiz (Pearson)
1. You receive a check for $100 two years from today. The discounted present value of
this $100 is:
2. Why do current prices on previously issued bonds offered for resale change when
the market interest rate chang
Chapter 4_ Understanding Interest Rates
MEASURING INTEREST RATES
Dollar paid to you one year from now is less valuable to you than a dollar paid to you
Simple Loan lender give borrower an amount of fund (principal) that must be repai
E305 Chapter 2
Function of Financial Markets
Lender Savers and Borrower Spenders
In direct finance, borrowers borrow fund directly from lenders in financial markets by selling
Securities = claims on borrowers future income or assets
Practice Topic 2
1) If the expected return on ABC stock falls from 10 to 5 percent and the expected return
on CBS stock is unchanged, then the expected return of holding CBS stock _
relative to ABC stock and the demand for CBS stock _.
a. rises; rises