Principles of Money Banking and Financial Markets 12th edition Lawrence S. Ritter, William L. Silber, Gregory F. Udell - Solutions

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Shell's commitment to the success of its foreign assignments is demonstrated by its efforts to uncover expatriate concerns. Discuss the results of Shell's survey to its present and past expatriates and families. How do these results compare to the results of other studies exploring expatriate
Shell has implemented several changes to its expatriate program including providing education assistance to families with children, and establishing a Spouse Employment Center to help locate employment opportunities. In your opinion, will these programs "solve" Shell's problems, or is there still
How does Monsanto's repatriation program provide an incentive for high-potential managers to accept overseas assignments?
After they return home, Monsanto's expatriate managers are given the opportunity to showcase their experience to their peers, subordinates, and superiors, in a special information exchange. Why is this important? What function does this serve in the repatriation process?
How does Monsanto's repatriation program help an expatriate manager adjust his personal life to returning home? Is this an important component of a firm's repatriation program?
What does McDonald's hope to gain from having a global compensation and performance appraisal system in place?
How does the compensation and performance appraisal system introduced at McDonald's allow managers to take local market differences into account? Why is this type of approach important to employees?
How would you characterize the strategy of competing internationally that Siemens was pursuing prior to the arrival of Peter Löscher? What are the benefits of this strategy? What are the costs? Why was Siemens pursuing this strategy?
What strategy was Peter Löscher trying to get Siemens to pursue with his streamlined "power and accountability" initiative? What are the benefits of this strategy? Can you see any drawbacks?
Does the "power and accountability" initiative imply that Siemens will ignore national and regional differences?
With the arrival of Joe Kaeser, the focus is much more on apps and websites. How can these individual, customer-based IT features help industrial-based IT companies such as Siemens?
Credit cards and travelers' checks are widely accepted as a medium of exchange. Should they be considered part of the money supply?
Is money necessary in an advanced economy? Are there alternative means of carrying out transactions and allocating resources over time?
Is it necessary to have something of value backing up money? What stands behind money in the United States?
What happens when a person has too much money? What about when an economy has too much money?
Is it possible to have inflation without monetary expansion in the short run? What about the long run? What about the reverse-monetary expansion without inflation?
Discuss the conditions required to allow an EU nation to replace its currency with the Euro?
Describe the characteristics an asset must possess in order to serve as a medium of exchange. Which of these is most important for the operation of the economy?
Is it possible for a nonmonetary economy to save and invest? How does money improve how resources are allocated over time?
What is the "right" amount of money in an economic system?
Describe how changes in the money supply affect GDP. When might this be inflationary?
Define the velocity of money. What determines velocity? How are changes in velocity related to inflation/deflation?
What happens to money and velocity during hyperinflation? What happens to the economy? Cite some historical examples.
"Financial intermediaries are just middlemen. Borrowers and lenders would be better off if they were cut out of the process." What do you think?
What future expectations of the economy would encourage you to buy stocks? Bonds?
Why is honesty and trust in handling financial market transactions likely to win out in the long run?
Under what conditions would financial disintermediation increase? Under what conditions would disintermediation be advisable?
Is there any reason to prefer opening an account with a bank over a savings and loan or vice versa? What should be your deciding factors?
What are the advantages and disadvantages of direct and indirect financing for the average saver/ lender?
What are the similarities and differences in stocks and bonds?
Describe the similarities and differences in futures and options contracts.
What is the primary difference between the money market and the capital market? Give three examples of financial instruments in each.
How can the profits of financial intermediaries be justified? In general terms, what are they selling to saver lenders?
How do portfolios of life insurance and property and casualty insurance companies differ? Do they require different investment strategies?
Is the risk of capital losses irrelevant if a person plans to hold a bond until maturity?
Why would anyone buy a bond that does not make interest payments?
If you expect interest rates to fall, should you buy long- or short-term bonds?
Interest rates were much higher in the late 1970s than the mid 1990s. Was credit more expensive back then?
What would happen to the equilibrium level of interest rates if: A. Borrowing for home building increased? B. A new highway program gets under way? C. Foreign creditors lose confidence in the United States? D. The Fed raises reserve requirements?
Assume a saver deposits $500 for two years in a bank account that pays 10 percent interest. What is the simple interest over two years? What would it be if the account were compounded annually? Why the difference?
Define the coupon rate on bonds. Is it a meaningful measure of the return on the bond? Is there a more accurate measure?
"Returns were much higher in the 1970s than in the early 1990s because the interest rates were much higher." True or false?
Using the loanable funds market diagram, demonstrate the effects of the following: A. A decrease in the saving rate B. An increase in business investment spending C. A reduction in the federal deficit D. A rise in inflationary expectations.
Explain the role of inflationary expectations, economic contraction, and Federal Reserve Policy in producing the record low interest rates observed at the end of 2007 and the beginning of 2008.
How does the size of the government deficit affect the term structure?
Under what conditions is the yield curve likely to have a negative slope?
Is there a preferred habitat for banks? credit unions? property insurance companies? life insurance companies?
Under what conditions is the spread between Treasury bonds and corporate bonds likely to increase?
Using the basic expectations theory, describe how the shape of the yield curve is determined.
What is a "liquidity premium?" When do investors increase their attention to such a premium?
What are the primary differences between municipal bonds and U.S. government bonds? Which is likely to have a higher yield?
What factors cause the differences in yields on U.S. government bonds?
Why is the sale of cars usually handled by dealers and the sale of real estate by brokers?
Did the stock market crashes of October 1987 and of 2001 prove that capital markets are not efficient?
Why have successful investment bankers received such high incomes lately? What service do they perform?
What characterizes securities with wide bid-asked spreads?
What are the differences between brokered and dealer markets? Would the New York Stock Exchange fit into one of these categories?
Describe the typical procedure in issuing new corporate equity. What role do investment banks play?
What is a meant by an efficient secondary market? How is its efficiency measured?
Why does over-the-counter stock have wider bid-asked spreads than do U.S. Treasury bills?
What is the difference between a primary and a secondary market?
Is the purchase of a state lottery ticket rational?
Develop a list of procyclical assets. Under what conditions would it be wise to consider including several of them in a portfolio? The market prices of stocks, property, and many commodities tend to move in a procyclical manner. Investors shift into these assets during a cyclical boom, driving
Develop a list of countercyclical assets. Under what conditions would it be wise to consider including several of them in a portfolio? Countercyclical assets would include such items as T bond and precious metals e.g., gold. Investors shift into these assets during an economic downturn, driving
What kinds of assets would you put in a $100,000 portfolio? What kind of tradeoff would you be willing to make between risk and return? How would you diversify?
Are there people who are risk lovers? If so, are they irrational?
What is meant by risk aversion? Is everyone risk averse?
Describe how a highly risky individual asset can reduce portfolio risk.
Discuss the difference between systematic and nonsystematic risk. How can each be reduced?
Who owns the U.S. government's debt?
What are the risks of foreign ownership of U.S. government debt? Could the United States possibly default on the debt owed to foreigners?
What are junk bonds? Would you ever recommend the purchase of them?
What does it mean for a city or state when its bond rating is reduced? Can they do anything about it?
Should a person who owns no stock be concerned about what happens in the stock market?
How are government securities stripped? How are yields then determined?
Who are the major buyers of corporate bonds? Why are those bonds a good asset for them to hold?
What is commercial paper? Who are the major issuers of it? How is it distributed?
What is the difference between a revenue municipal bond and a general-obligation municipal bond? Which is considered riskier and why?
What is the role of specialists and traders on the New York Stock Exchange?
Why are stock market analysts so concerned about what's going on at the Federal Reserve?
What may be the causes of the current subprime mortgage crisis?
What are speculators? Do they have a destabilizing effect on the financial system?
Under what conditions would you be a long hedger in financial futures? A short hedger?
Would you buy stock index futures at this time based on the S&P 500?
What are financial futures used for?
Aren't financial futures and options markets just serving a speculative buildup of asset prices fueled by greed?
Distinguish between financial futures and options contracts.
How are financial futures contracts standardized? What is benefit of this?
What is the role of arbitragers in futures markets? What impact do they have on futures prices?
Suppose you are advising a relatively risk-averse person. Would you recommend futures or options to him?
What are the primary determinants of the price of an option on an individual asset?
What would be the advantage to an exporter of buying a futures contract on the foreign exchange rate value of the dollar?
Is a deficit in the balance of payments a bad thing?
What has happened to the value of the dollar against the euro in the last six months? What might account for this?
When should a country attempt to depreciate its currency? How could it be done?
Don't all countries want to have a "strong" currency?
When the United Kingdom chose not to participate in the European Currency Union, it gave itself additional domestic monetary policy independence. How is this so?
On a foreign exchange market diagram with the dollar price of the British pound on the vertical axis, explain why you draw a downward-sloping demand curve.
On a foreign exchange market diagram with the dollar price of the British pound on the vertical axis, explain why you draw an upward-sloping supply curve.
Suppose a current equilibrium exchange rate is $1.10 per euro. Then the inflation rate in Europe starts rising relative to inflation in the United States. Draw a market diagram and explain what happens to the equilibrium exchange rate.

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Principles of Money Banking and Financial Markets 12th edition Lawrence S. Ritter, William L. Silber, Gregory F. Udell - Solutions

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