Financial Markets and Institutions (2-downloads)

Consumer Reports, 143

Consumers, 17

Contagion effect, 426

Continental Illinois, 428–29

Contingent commissions, 526

Contingent Credit Line, 394

Contingent deferred sales charges, 502

Contractual savings institutions, 27t,

28t, 29

Conventional mortgages, 330, 333t

Conversion, of bonds to common stock, 290

Conversion ratio, 290

Convertible bonds, 290

Corporate bonds, 281f, 288–93, 498. See

also bonds

call provisions, 289–90

characteristics of, 289–90

conversion to common stock, 290

coupon interest payments, 289

coupon interest rates, 289

default risk and, 90–92

defined, 2n

interest rates, 288–89, 288f, 289

junk bonds, 291, 293

liquidity of, 93–94

ratings, 288–89, 292t

registered, 289

restrictive covenants on, 289

risk, 288

secured, 290–91

as source of external funds, 135, 136f

types of, 290–91

unsecured, 291

Corporations. See also businesses

divisions, 550–51

financing decisions, 280

pension fund managers, 534

U.S. vs. foreign capital markets, 21

Corrective actions, 431, 433

Correspondent banking, 402

Costly state verification, 147

Council of Institutional Investors, 534

Counterparties, 592–93

Coupon bonds. See also bonds

calculating duration on, 57t

coupon payments, 42–43, 43n

defined, 39–40

effective maturity of, 56–57

expectations theory, 100n

finding the value of, 295–98

intermediate cash payments, 54n

as perpetuities, 46

rate of return, 50–53, 53t

term to maturity, 103n

yield to maturity, 42–46

Coupon interest payments, 289

Coupon interest rates, 289, 296t

Coupon rates, 39–40, 58, 281

Credit boom, 164

Credit cards, 137, 459–60, 476

Credit Control Act of 1969, 197

Credit crunch, 413

Credit culture, 179

Credit default swaps (CDS), 617

defined, 293–94

financial crisis of 2007–2009 and, 

172, 177

insurance and, 529–30

subprime mortgage crisis and, 618

Credit derivatives, 616–19, 620

Credit-driven bubbles, 243, 244, 245, 250

Credit events, 617

Credit insurance, 531

Credit lines, 414

Credit-linked notes, 617–18

Credit market instruments, 39–40

Credit markets, discrimination in, 436

“Credit Markets” Wall Street Journal,

82, 83

Credit options, 616–17

Creditors, 152

Credit-rating agencies

ancillary services by, 157

conflicts of interest and, 156–57

defined, 92

financial crisis of 2007–2009 and, 

158, 172

future regulations, 450

Credit ratings

accuracy of, 450

for bonds, 92, 93

conflicts of interest and, 156–57

credit derivatives and, 616–17

downgrading, 616

monoline insurers and, 531

reliability of, 93

Credit rationing, 572–73

Credit reports, 329

Credit risk, 569–73

bank management of, 405

credit rationing and, 572

defined, 568

Credit risk management, 569–73

adverse selection and, 569

asymmetric information and, 569

collateral, 571

compensating balances, 572

credit rationing, 572–73

loan commitments, 571

long-term customer relationships and,

570–71

moral hazard and, 569, 572–73

restrictive covenants for, 570

screening and monitoring, 569–70, 571

specialization in lending, 570

Credit scores, 329, 569–70, 572

Credit spreads

financial crisis of 2007–2009 and,

175, 176f

during Great Depression, 170, 170f

Credit Suisse, 260, 544

Credit Suisse First Boston, 159, 456

Credit swaps, 617

Credit unions, 27t, 28t, 29, 32, 483

Credit-worthiness, 328–29, 339

Currency

appreciation of, 346

central bank purchase/sales of, 375

currency in circulation vs., 215n

depreciation of, 346

devaluation of, 383

foreign, 375

overvaluation of, 382

pegging the value of one currency to

another, 380, 383–84, 389–90

revaluation of, 383

speculative attacks on, 385, 387

undervaluation of, 383

Currency boards, 384, 385

Currency crises

capital controls and, 391–92

in emerging market economies, 

181–82

financial crises and, 183, 186–87

inflation and, 183

Currency exchange, 4–5. See also foreign

exchange markets; foreign

exchange rates

efficient market hypothesis and, 124

published rates, 347t

Currency in circulation, 215, 215n

“Currency Trading,” Wall Street