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货币市场与资本市场pdf电子书版本下载
- 彼得 S·罗斯著 著
- 出版社： 北京：机械工业出版社
- ISBN：7111064100
- 出版时间：1998
- 标注页数：722页
- 文件大小：36MB
- 文件页数：740页
- 主题词：
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图书目录
Contents 1
Part One The Financial System in Perspective 1
Chapter One The Role of the Financial Svstem in the Global Economy 1
The Economy and the Financial System 2
Flows within the Economy System 2
The Role of Markets in the Economic System 2
Types of Markets 3
The Financial Markets and the Financial 3
System Channel for Sarings and Inrestmem 3
Functions Performed by the Financial System and the Financial Markets 5
Sarings Function 6
Wealth Function 6
Liquidity Function 7
Credit Function 7
Payments Function 7
Risk Function 8
Policy Function 8
Types of Financial Markets within the Financial System 9
The Money Market versus the Capital Market 9
Divisions of the Money and Capital Markets 11
Open versus Negotiated Markets 12
Primary versus Secondary Markets 12
Spot versus Futures.Forward. and Option Markets 14
Factors Tying All Financial Markets Together 15
The Dynamic Financial System 17
The Plan of This Book 17
Key Terms and Concepts in This Chapter 19
Study Questions 19
Problems 20
Selected References 22
Chapter Two Financial Assets, Money, and Financial Transactions 23
The Creation of Financial Assets 24
Characteristics of Financial Assets 24
Different Kinds of Financial Assets 24
The Creation Process for Financial Assets 25
Financial Assets and the Financial System 27
Lending and Borrowing in the Financial System 29
Money as a Financial Asset 31
What is Money? 31
The Functions of Money 31
The Evolution of Financial Transactions 34
Direct Finance 34
Semidirect finance 35
Indirect Finance 35
Relative Size and Importance of Major Financial Institutions 37
Classification of Financial Institutions 38
Portfolio Decisions by Financial Intermediaries and Other Financial Institutions 39
Disintermediation of Funds 39
New types of Disintermediation 40
Summary 41
Key Terms and Concepts in This Chapter 41
Study Questions 41
Problems 42
Selected References 43
Chapter Three Sources of Information for Financial Decision Making in the Money and Capital Markets 44
Efficient Markets and Asymmetric information 45
The Efficient Markets Hypothesis 45
The Concept of symmetric Information 48
Problems Informational Asymmetries Can Create:Lemons and Plums 49
Problems Asymmetries Can create:The Problem of Adverse Selection 50
Debt Security Prices and Yields 53
Stock Prices and Dividend Yields 56
Information on Security Issuers 59
General Economic and Financial Conditions 64
Social Accounting Data 66
National Income Accounts 66
The Flow of Funds Accounts 67
Summary 78
Key Terms and Concepts in This Chapter 79
Study Questions 79
Problems 79
Selected References 81
Part TWO The Management and Regulation of Financial Institutions 81
Chapter Four The Commercial Banking Industry 82
The Structure of U.S. Commercial Banking 83
A Trend Ioward Consolidation 84
Branch Banking 84
Bank Holding Companies 85
International Banking 86
Bank Failures 87
Changing Technology 88
Portfolio Characteristics of Commercial Banks 89
Cash and Due from Banks Primary Reserves 89
Security Holdings and Secondary Reserves 92
Loans 92
Deposits 93
Nondeposit Sources of Funds 94
Equity Capital 95
Revenues and Expenses 95
Money Creation and Destruction by Banks 98
Reserve Requirements and Excess Reserves 98
The Creation if Money and Credit 100
Destruction of Deposits and Reserves 104
Implications of Money Creation and Destruction 105
Summary 105
Key Terms and Concepts in This Chapter 105
Study Questions 105
Problems 106
Selected References 107
Chapter Five Nonbank Thrift Institutions: Credit Unions,Savings and Loan Associations, Savings Banks, and Money Market Mutual Funds 109
Credit Unions 110
Credit Union Membership 111
Size of Credit Unions 111
New Services Offered 112
A Strong Competitive Force 113
Savings and Loan Associations 113
Origins 113
How Funds Are Raised and Allocated 114
Trends in Revenues and Costs 116
Possible Remedies for the Industry's Problems 120
Savings Banks 120
Number and Distribution of Savings Banks 121
How Funds Are Raised and Allocated 121
Current Trends and Future Problems 122
Money Market Funds 122
Summary 129
Key Terms and Concepts in This Chapter 129
Study Questions 129
Problems 130
Selected References 131
Chapter Six Insurance Companies. Pension Funds, and Other Financial Institutions 132
Life Insurance Companies 132
The Insurance Principle 133
Investments of Life Insurance Companies 133
Sources of Life Insurance Company Funds 137
Structure and Growth of the Life Insurance Industry 137
New Services 137
Property-Casualty Insurance Companies 140
Makeup of the Property-Casualty (P/C) Insurance Industry 140
Changing Risk Patterns in Property/Liability Coverage 140
Investments by Property-Casualty (P/C) Companies 141
Sources of income 142
Business Cycles,Inflation,and Competition 142
Pension Funds 143
Growth of Pension Funds 144
Investment Strategies of Pension Funds 146
Pension Fund Assets 147
Factors Affecting the Future Growth of Pension Funds 147
Finance Companies 149
Different Finance Companies for Different Purposes 150
Growth of Finance Companies 150
Methods of Industry Financing 151
Recent Changes in the Character of the Finance Company Industry 152
Investment Companies 152
The Background of Investment Companies 152
Tax Status of the Industry 154
Open-End and Closed-End Investment Companies 154
Goals and Earnings of Investment Companies 155
Other FinanciaI Institutions 156
Trends Affecting All Financial Institutions Today 160
Summary 161
Key Terms and Concepts in This Chapter 162
Study Questions 162
Problems 162
Selected References 163
Chapter Seven The Regulation of Financial Institutions 164
The Reasons behind the Regulation of Financial Institutions 165
Does Regulation Benefit or Harm Financial Institutions? 166
The Regulation of Commercial Banks 167
The Federal Reserve System 168
The Comptroller of the Currency 168
Federal Deposit lnsurance Corporation 168
State Banking Commissions 170
Regulations Controlling the Geographic Expansion of Banks 170
Regulation of the Services Banks Can Offer 174
The Rise of Disclosure Laws in Banking 176
The Growing Importance of Capital Regulation in Banking 176
The Unfinished Agenda for Banking Regulation 178
The Regulation of Nonbank Thrift Institutions 180
Credit Unions 180
Savings and Loans 181
Savings Banks 185
Money Market Funds 185
The Regulation of lnsurance Companies 186
The Regulation of Pension Funds 186
The Regulation of Finance Companies 187
The Regulation of Investment Companies 187
An Overview of Trends in the Regulation of Financial Institutions 188
Key Terms and Concepts in This Chapter 190
Study Questions 191
Problems 191
Selected References 191
Part Three Interest Rates and Security Prices 191
Chapter Eight Interest Rates in the Financial System 192
Functions of the Rate of Interest in the Economy 193
The Classical Theory of Interest Rates 193
Saving by Households 194
Saving by Business Firms 194
Saving by Government 195
The Demand for Investment Funds 195
The Equilibrium Rate of Interest in the Classical Theory of Interest 198
Limitarions of the Classical Theory of Interest 200
The Liquidity Preference Theory 200
The Demand for Liquidity 200
The Supply of Money 202
The Equitibrium Rate of Interest in Liquidity Preference Theory 203
Limitations of the Liquidity Preference Theory 204
The Loanable Funds Theory 205
Consumer Demand for Loanable Funds 205
Domestic Business Demand for Loanable Funds 205
Government Demand for Loanable Funds 205
Foreign Demand for Lounable Funds 206
Total Demand for Loanable Funds 206
The Supply of Loanable Funds 206
Total Supply of Loanable Funds 208
The Equilibrium Rate of Interest in the Loanable Funds Theory 208
The Rational Expectations Theory 211
Summary 215
Key Terms and Concepts in This Chapter 216
Study Questions 216
Problems 217
Selected References 218
Chapter Nine Relationships between Interest Rates and Security Prices 219
Units of Measurement for lnterest Rates and Security Prices 219
Definition of Interest Rates 219
Basis Points 220
Security Prices 220
Measures of the Rate of Return,or Yield, on a Loan or Security 221
Coupon Rate 221
Current Yield 222
Yield to Maturity 222
Holding-Period Yield 223
Calculating Yields to Maturity and Holding-Period Yields 224
Yield-Price Relationships 227
Interest Rates Charged by Institutional Lenders 229
The Simple Interest Method 230
Add-On Rate of Interest 230
Discount Method 231
Home Mortgage Interest Rate 231
Annual Percentage Rate(APR) 232
Compound Interest 233
The Annual Percentage Yield(APY) 235
Summary 236
Key Terms and Concepts in This Chapter 236
Study Questions 236
Problems 237
Selected References 238
Chapter Ten Inflation, Yield Curves, and Duration 239
Inflation and Interest Rates 240
The Correlation between Inflation and Interest Rates 240
The Nominal and Real Interest Rates 240
The Fisher Effect 241
The Harrod-Keynes Effect Of Inflation 242
Alternative Views on Inflation and Interest Rates 243
Inflation and Stock Prices 248
The Maturity of a Loan 250
The Yield Curve and the Term Structure of Interest Rates 250
Types of Yield Curves 250
The Unbiased Expectations Hypothesis 251
The Role of Expectations in Shaping the Yield Curve 253
Relative Changes in Long-Term Interest Rates 253
Policy Implications of the Unbiased Expectations Hypothesis 254
The Liquidity Premium View Of the Yield Curve 255
The Segmented-Markets or Hedging-Pressure Argument 255
Policy implications of the Segmented-Markets Theory 256
The Preferred Habitat or Composite Theory of the Yield Curve 257
Research Evidence on Yield-Curve 258
Theories 258
Uses of the Yield Curve 261
Duration: A Different Approach to Maturity 262
The Price Elasticity of a Debt Security 262
The Impact of Varying Coupon Rates 263
An Alternative Maturity Index for a Security:Duration 264
Uses of Duration 265
Limitations of Duration 267
Summary 268
Key Terms and Concepts in This Chapter 269
Study Questions 269
Problems 270
Selected References 271
Chapter Eleven Default Risk, Taxes, and Other Factors Affecting Interest Rates 273
Marketability 274
Liquidity 274
Default Risk and Interest Rates 275
The Premium for Default Risk 275
The Expected Rate of Return or Yield on a Risky Security 276
AnticiPated Loss and Default-Risk Premiums 276
Factors Influencing Default-Risk Premiums 277
The Rise and Fall of Junk Bonds 283
A Summary of the Default Risk, Interest Rate Relationship 284
Call Privileges 284
Calculating the Yields on Called Securities 284
Advantages and Disadvantages of the Call Privilege 287
The Call Premium and Interest Rate Expectations 287
Research Evidence 288
Effect of Coupon Rates on Call Risk 288
Prepayment Risk and Interest Rates on Loan-Backed Securities 289
Taxation of Security Returns 290
The Tax Treatment of Capital Gains 290
Treatment of Capital Losses 292
Tax-Exempt Securities 292
Convertible Securities 294
The Structure of Interest Rates 295
Key Terms and Concepts in This Chapter 296
Study Questions 296
Problems 297
Selected References 298
Chapter Twelve Interest Rate Forecasting and Hedging against Interest Rate Risk 299
The Influence of the Business Cycle in Shaping Interest Rates 300
Relative Movements in Short-and Long-Term Interest Rates and Security Prices over the Business Cycle 301
Seasonality 302
Forecasting Interest Rates: Advantages and Problems 303
Advantages of Rate Forecasting 303
Problems in Forecasting Interest Rates 303
Approaches to Modem Interest Rate Forecasting 304
Money Supply APProaches 304
Inflation and the Fisher Effect 305
Econometric Models 306
The Flow of Funds Accounts as a Source of Forecasting Information 307
Following the Forward Calendar of New Security Offerings 308
Market Expectations and Implied Rate Forecasting 308
The Consensus Forecast 310
Interest-Rate-Risk Hedging Strategies 310
Duration 310
Stripped Securities 311
GAP Management 312
Interest Rate Caps and Collars 313
Interest Rate Insurance 313
Loan Options 314
Interest Rate SWAPS 314
Summary 318
Key Terms and Concepts in This Chapter 319
Study Questions 319
Problems 320
Selected References 321
Chapter Thirteen FinanciaI Futures and Options Contracts 323
The Nature of Futures Trading 323
General Principles of Hedging 324
Opening and Closing a Hedge 324
Why Hedging Can Be Effective 325
Risk Selection through Hedging 326
FinanciaI Futures 326
The Purpose of Trading in Financial Futures 327
Securities Used in Financial Futures Contracts 328
U.S. Treasury Bonds and Notes 329
U.S. Treasury Bills 330
Eurodollar Time Deposits 331
Other Money Market Futures Contracts 331
Municipal State and Local Government Bonds 331
New Foreign-Bond-Index Futures Contracts 331
Stock Index Futures 332
Types of Hedging in the Financial Futures Market 333
The Long (or Buying) Hedge 333
The Short (or Selling)Hedge 334
Cross Hedging 335
The Mechanics of Futures Trading 336
Payoff Diagrams for Long and Short Futures Contracts 338
Options Contracts on Financial Futures 339
Basic Types of Option Contracts 339
Option Contracts for Money Market and Capital Market Instruments 340
Uses of Options on futures Contracts 341
Payoff Diagrams for Valuing Options 343
The Black-Scholes Model for Valuing Options 347
Traders Active in the Futures and Options Markets 348
Potential Benefits from the Futures and Options Markets 349
Summary 352
Key Terms and Concepts in This Chapter 353
Study Questions 353
Problems 354
Selected References 355
Part Four The Money Market 356
Chapter Fourteen Characteristics of the Money Market 356
Characteristics of the Money Market 357
The Need for a Money Market 357
Borrowers and Lenders in the Money Market 358
The Goals of Money Market Investors 358
Types of Investment Risk 359
Money Market Maturities 360
Depth and Breadth of the Money Market 360
Federal funds versus Clearinghouse Funds 361
A Market for Large Borrowers and Lenders 361
The Volume of Money Market Securities 363
The Pattern of Interest Rates in the Money Market 364
Summary 366
Key Terms and Concepts in This Chapter 367
Study Questions 367
Problems 367
Selected References 368
Chapter Fifteen Treasury Bills, Dealer Loans, and Repurchase Agreements 369
U.S. Treasury Bills 370
Volume of Bills Outstanding 370
Types of Treasury Bills 371
How Bills Are Sold 371
Results of a Recent Bill Auction 372
Calculating the Yield on Bills 373
Market Interest Rates on Treasury Bills 375
Investors in Treasury Bills 377
Primary Dealers, Dealer Loans, and Repurchase Agreements 378
Scandal Rocks the Market for Government Securities 378
Proposals for New Ways to Auction Government Securities 379
Dealers Reliance on Borrowed Funds 381
Demand Loans 381
Repurchase Agreements 381
Sources of Dealer Income 383
Dealer positions in Securities 384
Changing Sources of Dealer Financing 385
Dealer Transactions and Government Security Brokers 385
Summary 386
Key Terms and Concepts in This Chapter 387
Study Questions 387
Problems 387
Selected References 388
Chapter Sixteen Federal Funds, Negotiable CDs, and Loans from the Discount Window 389
Federal Funds 390
Nature of Federal Funds 390
Use of the Federal Funds Market to Meet Deposit Reserve Requirements 391
Mechanics of Federal Funds Trading 392
Volume of Borrowings in the Funds Market 393
Rates on Federal Funds 393
Federal Funds and Government Policy 394
Negotiable Certificates of Deposit 394
Growth of CDs 396
Terms Attached to CDs 396
Buyers of CDs 397
Cds in Liability Management 398
New Types of CDs 398
Loans from the Federal Reserve's Discount Window 400
Causes and Effects of Borrowing from the Discount Window 400
Collateral for Discount Window Loans 401
Restrictions on Federal Reserve Credit 401
The Federal Reserve's Discount Rate 402
Concluding Comment on Bank Activity in the Money Market 404
Key Terms and Concepts in This Chapter 405
Study Questions 405
Problems 406
Selected References 406
Chapter Seventeen Commercial Paper and Federal Agency Securities 407
Commercial Paper 408
What Is Commercial PaPer? 408
Types of Commercial Paper 408
Recent Growth Of Commercial PaPer 410
Maturities and Rates of Return on Commercial PaPer 413
Changing Yields on PaPer Issues 413
Advantages of Issuing Commercial PaPer 414
Possible Disadvantages from Issuing Commercial PaPer 415
Principal investors 415
Continuing Innovation in the PaPer Market 416
Commercial PaPer Ratings 417
Dealers in PaPer 418
Federal Agency Securities 418
Types of Federal Credit Agencies 419
Growth Of the Agency Market 420
Terms on Agency Securities 421
The Marketing Of Agency Issues 422
Summary 423
Key Terms and Concepts in This Chapter 423
Study Questions 424
Problems 424
Selected References 425
Chapter Eighteen International Money Market Instruments:Bankers' Acceptances and Eurodollars 426
Bankers' Acceptances 427
Why AccePtances Are Used in International Trade 427
How AccePtances Arise 428
Recent Growth of Acceptance Financing 429
Acceptance Rates 431
Investors in Acceptances 432
Eurodollars 432
What is a Eurodollar? 433
The Creation of Eurodollars 433
Eurodollar Maturities and Risks 436
The Supply of Eurodollars 437
Eurodollars in Domestic Bank Operations 437
Recent Innovations in the Eurodollar Market 439
Benefits and Costs of the Eurodollar Market 439
Summary 440
Key Terms and Concepts in This Chapter 441
Study Questions 441
Problems 441
Selected References 442
Part Five 443
Central Banking and Monetary Policy 443
Chapter Nineteen Central Banking and the Role of the Federal Reserve 443
The Role of Central Banks in the Economy 444
Control of the Money Supply 444
Stabilizing the Money and Capital Markets 444
Lender of Last Resort 445
Maintaining and Improving the Payments Mechanism 445
The Goals and Channels of Central Banking 445
The Channels through Which Central Banks Work 446
The History of the Federal Reserve System 447
Problems in the Early U.S. Banking System 449
Creation of the Federal Reserve System 450
The Early Structure of the Federal Reserve System 451
Goals and Policy Tools of the Federal Reserve System 451
How the Fed is Organized 452
Board of Governors of the Federal Reserve System 452
The Federal Open Market Committee and Manager of the System Open Market Account 453
The Federal Reserve Banks 454
The Member Banks of the Federal Reserve System 455
Roles of the Federal Reserve System Today 458
The Clearing and Collection of Checks and Other Means of Payment 458
Issuing Currency and Com and Providing Other Services 459
Maintaining a Sound Banking and Financial system 459
Serving as the Federal Governments Fiscal Agent 460
Carrying out Monetary Policy 460
Providing information to the Public 460
Summary 460
Key Terms and Concepts in This Chapter 461
Study Questions 462
Selected References 462
Chapter Twenty The Tools of Monetary Policy 463
Reserves and Money—Targets of Federal Reserve Policy 463
The Composition of Reserves 464
The Deposit Multiplier 464
The Money Multiplier 466
General versus Selective Credit Controls 468
The General Credit Controls of the Fed 468
Reserve Reauirements 468
Changes in the Federal Reserves Discount Rate 471
Open Market Operations 474
Selective Credit Controls Used by the Fed 481
Moral Suasion by Federal Reserve Officials 483
Margin Requirements 483
Summary 484
Key Terms and Concepts in This Chapter 485
Study Questions 485
Problems 485
Selected References 486
Chapter Twenty-One Indicators and Goals of Monetary Policy 487
Factors Influencing the Reserves of the Banking System 488
Actions of the Public Affecting Reserves 488
Operations of the Treasury and Foreign Investors Affecting Reserves 489
Federal Reserve Operations Affecting reserves 490
The Heart of The Monetary Policy Process Controlling Reserves to Achieve Desired Target Levels 490
The Federal Reserve Statement 490
Factors Supplying Reserves 491
Factors Absorbing Reserves 492
Measures of the Money Supply 492
Money Supply Measures 493
Federal Reserve Control of Money Supply Growth 494
Achieving the Fed's Money Supply Targets 496
Money Market Indicators 496
The Federal Funds Rate 497
Other Money Market Interest Rates 498
Free Reserves 498
The Federal Reserve and Economic Goals 500
The Goal of Controlling Inflation 500
The Goal of Full Employment 501
The Goal of Sustainable Economic Growth 503
Equilibrium in the U.s.Balance of Payments and Protecting the Dollar 504
What Policies Should We Pursue to Achieve National and International Economic Goals? 505
Monetarist View 505
The Credit Availability,or Neo-Keynesian View 506
Supply Side Economics 508
The Trade-Offs among Economic Goals 509
The Limitations of Monetary Policy 510
Key Terms and Concepts in This Chapter 510
Study Questions 510
Problems 511
Selected References 511
Part Six 513
The Roles Played by Governments within the Financial System 513
Chapter Twenty-Two The Treasury in the Financial Markets 513
The Fiscal Policy Activities of the U.S.Treasury 513
Sources of Federal Government Funds 514
Federal Government Expenditures 515
Recent Tax and Expenditure Legislation 516
Effects of Federal Borrowing and Budget Deficits on the Financial System and the Economy 516
Effects of the Retirement of Government Debt from a Budget Surplus on the Financial System and the Economy 518
Overall Impact of Government Borrowing and Spending 521
Management of the Federal Debt 522
The Size and Growth of the Public Debt 523
The Composition of the Public Debt 525
Marketable Public Debt 525
Nonmarketable Public Debt 525
Investors in U.S.Government Securiies 526
A Trend toward Shorter Maturities 527
Methods of Offering Treasury Securities 528
The Goals of Federal Debt Management 531
The Impact of Federal Debt Management on the Financial Markets and the Economy 532
Summary 533
Key Terms and Concepts in This Chapter 533
Study Questions 534
Problems 534
Selected References 535
Chapter Twenty-Three State and Local Governments in the Financial Markets 536
Growth of State and Local Government Borrowing 537
Sources of Revenue for State and Local Governments 538
State and Local Government Expenditures 539
Motivations for State and Local Government Borrowing 540
Types of Securities lssued by State and Local Governments 540
Short-Term Securities 541
Long-Term Securities 541
Types of Revenue Bonds 542
Innovations in Municipal Securities 543
Key Features of Municipal Debt 544
Tax Exemption 544
Exemption Contributes to Market Volatility 546
Credit ratings 546
Seriali=ation 548
How Municipal Bonds Are Marketed 549
Problems in the Municipal Market 550
Problems and Proposals Regarding Tax Exemption 550
California's Proposition 13 and Taxpayer Resistance 550
The Outlook for State and Local Governments 550
Key Terms and Concepts in This Chapter 551
Study Questions 551
Problems 552
Selected References 552
Part seven The Consumer in the Financial Markets 553
Chapter Twenty-Four Consumer Lending and Borrowing 553
Consumers as Lenders of Funds 553
FinanciaI Assets Purchased by Consumers 554
The Growing Menu of Sarings Instruments Available to Consumers 555
Consumers as Borrowers of Funds 557
Is Consumer Borrowing Excessive? 558
Categories of Consumer Borrowing 559
Home Equity Loans 560
Credit and Debit Cards 561
Credit Cards 561
Debit Cards 561
The Determinants of Consumer Borrowing 562
Consumer Lending Institutions 563
Commercial Banks 563
Finance Companies 563
Other Consumer Lending Institutions 564
Factors Considered in Making Consumer Loans 564
Financial Disclosure and Consumer Credit 565
Truth in Lending 565
Fair Credit Billing Act 567
Fair Credit Reporting Act 567
Consumer Leasing Act 568
Competitive Banking Equality Act 568
Truth in Savings Act 568
Credit Discrimination Laws 568
Community Reinvestment Act and Financial Institutions Reform, Recovery and Enforcement Act 568
Equal Credit Opportunity ACt 569
Fair Housing and Home Mortgage Disclosure Act 569
Consumer Bankruptcy Laws 569
Summary 570
Key Terms and Concepts in This Chapter 571
Study Questions 571
Problems 572
Selected References 573
Chapter Twenty-Five The Residential Mortgage Market 574
Recent Trends in New Home Prices and the Terms of Mortgage Loans 575
The Structure of the Mortgage Market 576
Volume Of Mortgage Loans 576
Residential versus Nonresidential Mortgage Loans 576
Mortgage-Lending Institutions 577
The Roles Played by Financial Institutions in the Mortgage Market 577
Savings and Loan Associations 578
Commercial Banks 579
Life Insurance Companies 579
Savings Banks 579
Mortgage Bankers 579
Government Activity 580
The Impact of the Great Depression on Government Involvement in the Mortgage Market 580
The Creation of Fannie Mae (FNMA) 581
The Creation of Ginnie Mae (GNMA) 581
The Federal Home Loan Mortgage Corporation(FHLMC 581
Innovations in Mortgage Instruments 582
Variable-Rate and Other Adjustable Mortgages 583
Convertible Mortgages 583
Canadian Rollover and Other Renegotiated Mortgage Loans 584
Reverse-Annuity Mortgages 584
Graduated-Payment Mortgages 584
Epilogue on the Fixed-Rate Mortgage 585
Creative Financing Techniques 585
Second Mortgages 585
Home-Leasing Plans 585
Land-Leasing Plans and Property Exchanges 585
Refinancing Home Mortgages and Home Equity Loans 586
Summary 586
Key Terms and Concepts in This Chapter 587
Study Questions 587
Selected References 588
Part Eight Businesses in the Financial Markets 589
Chapter Twenty-Six Business Borrowing 589
Factors Affecting Business Activity in the Money and Capital Markets 589
Characteristics of Corporate Notes and Bonds 590
PrinciPal Features of CorPorate Notes and Bonds 591
Term Bonds versus Serial Bonds 591
Recent Trends in Original Maturities of Bonds 591
Call Privileges 592
Sinking Fund Provisions 592
Yields and Costs Of CorPorate Bonds 592
The Most Common Types of Corporate Bonds 593
New Types of Corporate Notes and Bonds 595
Investors in Corporate Notes and Bonds 596
The Secondary Market for Corporate Bonds 597
The Marketing of Corporate Notes and Bonds 598
The Public Sale of Bonds 598
Private Placements of Corporate Bonds 599
The Volume of Borrowing in the Corporate Bond Market 601
Bank Loans to Business Firms 602
The Prime, or Base, Interest Rate 603
Commercial Mortgages 604
Summary 605
Key Terms and Concepts in This Chapter 606
Study Questions 607
Problems 607
Selected References 608
Chapter Twenty-Seven 609
Corporate Stock 609
Characteristics of Corporate Stock 610
Common Stock 610
Preferred Stock 611
Stock Market Investors 612
Characteristics of the Corporate Stock Market 613
The Major Organized Exchanges 614
The Informal Over-the-Counter Market 616
The Third Market: Trading in Listed Securities off the Exchange 617
The Market for Stock Options 617
Call Options 617
Puts 618
Straddles 618
The Growth of Options Markets 618
The Rise of Program Trading:Portfolio Insurance and Stock Index Arbitraging 619
The Development of a Unified International Market for Stock 620
Random Walk and Efficient Markets 625
Summary 626
Key Terms and Concepts in This Chapter 627
Study Questions 627
Selected References 627
Part Nine The International Financial System and the Future 629
Chapter Twenty-Eight International Transactions and Currency Values 629
The Balance of Payments 630
The U.s.Balance of Imernational Payments 630
The Current Aecoum 631
The Capital Aecoum 634
The Basic Balance 634
Official Reserve Transactions 635
Disequilibrium in the Balance of Payments 635
The Problem of Different Monetary Units in International Trade and Finance 636
The Gold Standard 636
The Gold Exchange Standard 637
The Modified Exchange Standard 637
Adoption of a New Managed Floating Currency Bank 637
Standard 638
Determining Foreign Currency Values in Today's Markets 639
Essential Features of the Foreign Exchange Market 640
Exchange Rate Quotations 640
Factors Affecting Foreign Exchange Rates 641
Supply and Demand for Foreign Exchange 643
The Forward Market for Currencies 645
Methods of Quoting Forward Exchange Rates 645
Functions of the Forward Exchange Market 646
Commercial Covering 647
Hedging an Investment Position 647
Speculation on Future Currency Prices 647
Covered Interest Arbitrage 648
The Principle of Interest Rate Party 648
The Market for Foreign Currency Futures 649
Other Innovative Methods for Dealing with Currency Risk 650
Government Intervention in the Foreign Exchange Markets 652
Key Terms and Concepts in This Chapter 653
Study Questions 653
Problems 654
Selected References 655
Chapter Twenty-Nine International Banking 656
The Scope of International Banking Activities 657
Multinational Banking Corporations 657
Types of Facilities Operated by Banks Abroad 657
Services Offered by Intemational Banks 658
Issuing Letters of Credit 658
Buying and Selling Foreign Exchange(FORFX) 658
Issuing Bankers'Acceptances 658
Accepting Eurocurrency Deposits and Making Eurocurrency Loans 658
Marketing and Underwriting of Both Domestic and Eurocurrency Bonds,Notes,and Equity Shares 659
Securitizing Loans 659
Other Services Provided by International Banks 660
Foreign Banks in the United States 660
Recent Growth of Foreign Banks in the United States 660
Federal Regulation of Foreign Bank Activity 661
Regulation of the International Banking Activities of U.S. Banks 662
The Future of International Banking 664
The Risks of International Lending 664
Public Confidence and Bank failures 665
The SPread of Deregulation:how Fast should We Go? 666
Prospects and Issues in the l990s 667
Key Terms and Concepts in This Chapter 668
Study Questions 668
Selected References 668
Chapter Thirty The Future or the Financial System 669
Social,Economic,and Demographic Forces and Trends Reshaping the Financial System 670
The Challenges and Opportunities Presented by Recent Trends 672
Dealing with Risk in the Financial System:Ensuring the Strength and Viability of Financial Institutions 672
The Implications of Inflation for Financial Institutions 675
The Effect of New Technology on the Design and Delivery of Financial Services 676
The Changing Mix of Financial Service Suppliers 679
Management Coordination within Diversified Financial Institutions 681
Steps Toward Better Management Coordination 681
The Future Of Alternative Financial Service Distribution Systems 682
The Future Need for Regulation of Financial Institutions 682
Regulations That Could Grow 685
Summary and a Look Forward 686
Key Terms and Concepts in This Chapter 686
Study Questions 687
Selected References 687
Appendix: Present Value, Annuity,Compound lnterest, and Annual Percentage Rate(APR)Tables 688
Money and Capital Markets Dictionary 697
Index 710
Contents in Brief 1
Part One 1
The Financial System in Perspective 1
Chapter One 1
The Role of the FinanciaI System in theGlobal Economy 1
Chapter Two 23
Financial Assets, Money, and Financial Transactions 23
Chapter Three 44
Sources of Information for Financial Decision Making in the Money and Capital Markets 44
Chapter Four 82
The Commercial Banking Industry 82
Chapter Five 109
Nonbank Thrift Institutions: Credit Unions, Savings and Loan Associations, Savings Banks, and Money Market Mutual Funds 109
Chapter Six 132
Insurance Companies, Pension Funds, and Other Financial Institutions 132
Chapter Seven 164
The Regulation of Financial Institutions 164
Chapter Eight 192
Interest Rates in the Financial System 192
Chapter Nine 219
Relationships between Interest Rates and Security Prices 219
Chapter Ten 239
Inflation, Yield Curves, and Duration 239
Chapter Eleven 273
Default Risk, Taxes, and Other Factors Affecting Interest Rates 273
Chapter Twelve 299
Interest Rate Forecasting and Hedging against Interest Rate Risk 299
Chapter Thirteen 323
FinanciaI Futures and Options Contracts 323
Part Four 356
The Money Market Chapter Fourteen Characteristics of the Money Market 356
Chapter Fifteen 369
Treasury Bills, Dealer Loans, and Repurchase Agreements 369
Chapter Sixteen 389
Federal Funds, Negotiable CDs, and Loans from the Discount Window 389
Chapter Seventeen 407
Commercial Paper and Federal Agenc Securities 407
Chapter Eighteen 426
International Money Market Instruments:Bankers' Acceptances and Eurodollars 426
Chapter Nineteen 443
Central Banking and the Role of the Federal Reserve 443
Chapter Twenty 463
The Tools of Monetary Policy 463
Chapter Twenty-one 487
Indicators and Goals of Monetary Policy 487
Chapter Twenty-Two 513
The Treasury in the Financial Markets 513
Chapter Twenty-Three 536
State and Local Governments in the Financial Markets 536
Chapter Twenty-Four 553
Consumer Lending and Borrowing 553
Chapter Twenty-Five 574
The Residential Mortgage Market 574
Chapter Twenty-Six 589
Business Borrowing 589
' Chapter Twenty-Seven 609
Corporate Stock 609
Chapter Twenty-Eight 629
International Transactions and Currency Values 629
Chapter Twenty-Nine 656
International Banking 656
Chapter Thirty 669
The Future of the Financial System 669
Appendix: Present Value, Annuity,Compound Interest, and Annual Percentage Rate(APR)Tables 688
Money and Capital Markets Dictionary 697
Index 710