Financial Markets and Institutions (2-downloads)

Document Outline

• Cover
• Title Page
• Copyright Page
• Contents
• Contents on the Web
• Preface
  • A Note from Frederic Mishkin
  • What’s New in the Seventh Edition
  • Hallmarks
  • Flexibility
  • Making It Easier to Teach Financial Markets and Institutions
  • Pedagogical Aids
  • Supplementary Materials
  • Acknowledgments
• Acknowledgments
• About the Authors
• PART ONE: INTRODUCTION
  • Chapter 1 Why Study Financial Markets and Institutions?
    • Preview
    • Why Study Financial Markets?
    • Why Study Financial Institutions?
    • Applied Managerial Perspective
    • How We Will Study Financial Markets and Institutions
    • Web Exercise
    • Concluding Remarks
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 2 Overview of the Financial System
    • Preview
    • Function of Financial Markets
    • Structure of Financial Markets
    • Internationalization of Financial Markets
    • GLOBAL: Are U.S. Capital Markets Losing Their Edge?
    • Function of Financial Intermediaries: Indirect Finance
    • FOLLOWING THE FINANCIAL NEWS: Foreign Stock Market Indexes
    • GLOBAL: The Importance of Financial Intermediaries Relative to Securities Markets: An International Comparison
    • Types of Financial Intermediaries
    • Regulation of the Financial System
    • Summary
    • Key Terms
    • Questions
    • Web Exercises
• PART TWO: FUNDAMENTALS OF FINANCIAL MARKETS
  • Chapter 3 What Do Interest Rates Mean and What Is Their Role in Valuation?
    • Preview
    • Measuring Interest Rates
    • GLOBAL: Negative T-Bill Rates? It Can Happen
    • The Distinction Between Real and Nominal Interest Rates
    • The Distinction Between Interest Rates and Returns
    • MINI-CASE: With TIPS, Real Interest Rates Have Become Observable in the United States
    • MINI-CASE: Helping Investors Select Desired Interest-Rate Risk
    • THE PRACTICING MANAGER: Calculating Duration to Measure Interest-Rate Risk
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 4 Why Do Interest Rates Change?
    • Preview
    • Determinants of Asset Demand
    • Supply and Demand in the Bond Market
    • Changes in Equilibrium Interest Rates
    • CASE: Changes in the Interest Rate Due to Expected Inflation: The Fisher Effect
    • CASE: Changes in the Interest Rate Due to a Business Cycle Expansion
    • CASE: Explaining Low Japanese Interest Rates
    • CASE: Reading the Wall Street Journal "Credit Markets" Column
    • FOLLOWING THE FINANCIAL NEWS: The "Credit Markets" Column
    • THE PRACTICING MANAGER: Profiting from Interest-Rate Forecasts
    • FOLLOWING THE FINANCIAL NEWS: Forecasting Interest Rates
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
    • Web Appendices
  • Chapter 5 How Do Risk and Term Structure Affect Interest Rates?
    • Preview
    • Risk Structure of Interest Rates
    • CASE: The Subprime Collapse and the Baa-Treasury Spread
    • CASE: Effects of the Bush Tax Cut and Its Possible Repeal on Bond Interest Rates
    • Term Structure of Interest Rates
    • FOLLOWING THE FINANCIAL NEWS: Yield Curves
    • MINI-CASE: The Yield Curve as a Forecasting Tool for Inflation and the Business Cycle
    • CASE: Interpreting Yield Curves, 1980–2010
    • THE PRACTICING MANAGER: Using the Term Structure to Forecast Interest Rates
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 6 Are Financial Markets Efficient?
    • Preview
    • The Efficient Market Hypothesis
    • Evidence on the Efficient Market Hypothesis
    • MINI-CASE: An Exception That Proves the Rule: Ivan Boesky
    • CASE: Should Foreign Exchange Rates Follow a Random Walk?
    • Overview of the Evidence on the Efficient Market Hypothesis
    • THE PRACTICING MANAGER: Practical Guide to Investing in the Stock Market
    • MINI-CASE: Should You Hire an Ape as Your Investment Adviser?
    • CASE: What Do the Black Monday Crash of 1987 and the Tech Crash of 2000 Tell Us About the Efficient Market Hypothesis?
    • Behavioral Finance
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
• PART THREE: FUNDAMENTALS OF FINANCIAL INSTITUTIONS
  • Chapter 7 Why Do Financial Institutions Exist?
    • Preview
    • Basic Facts About Financial Structure Throughout the World
    • Transaction Costs
    • Asymmetric Information: Adverse Selection and Moral Hazard
    • The Lemons Problem: How Adverse Selection Influences Financial Structure
    • MINI-CASE: The Enron Implosion
    • How Moral Hazard Affects the Choice Between Debt and Equity Contracts
    • How Moral Hazard Influences Financial Structure in Debt Markets
    • CASE: Financial Development and Economic Growth
    • MINI-CASE: Should We Kill All the Lawyers?
    • CASE: Is China a Counter-Example to the Importance of Financial Development?
    • Conflicts of Interest
    • MINI-CASE: The Demise of Arthur Andersen
    • MINI-CASE: Credit Rating Agencies and the 2007–2009 Financial Crisis
    • MINI-CASE: Has Sarbanes-Oxley Led to a Decline in U.S. Capital Markets?
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 8 Why Do Financial Crises Occur and Why Are They So Damaging to the Economy?
    • Preview
    • Asymmetric Information and Financial Crises
    • Dynamics of Financial Crises in Advanced Economies
    • CASE: The Mother of All Financial Crises: The Great Depression
    • CASE: The 2007–2009 Financial Crisis
    • INSIDE THE FED: Was the Fed to Blame for the Housing Price Bubble?
    • GLOBAL: Ireland and the 2007–2009 Financial Crisis
    • Dynamics of Financial Crises in Emerging Market Economies
    • CASE: Financial Crises in Mexico, 1994–1995; East Asia, 1997–1998; and Argentina, 2001–2002
    • GLOBAL: The Perversion of the Financial Liberalization/Globalization Process: Chaebols and the South Korean Crisis
    • Summary
    • Key Terms
    • Questions
    • Web Exercises
    • Web References
• PART FOUR: CENTRAL BANKING AND THE CONDUCT OF MONETARY POLICY
  • Chapter 9 Central Banks and the Federal Reserve System
    • Preview
    • Origins of the Federal Reserve System
    • INSIDE THE FED: The Political Genius of the Founders of the Federal Reserve System
    • Structure of the Federal Reserve System
    • INSIDE THE FED: The Special Role of the Federal Reserve Bank of New York
    • INSIDE THE FED: The Role of the Research Staff
    • INSIDE THE FED: Green, Blue, Teal, and Beige: What Do These Colors Mean at the Fed?
    • INSIDE THE FED: How Bernanke's Style Differs from Greenspan's
    • How Independent Is the Fed?
    • Structure and Independence of the European Central Bank
    • Structure and Independence of Other Foreign Central Banks
    • Explaining Central Bank Behavior
    • Should the Fed Be Independent?
    • INSIDE THE FED: The Evolution of the Fed's Communication Strategy
    • Summary
    • Key Terms
    • Questions and Problems
    • Web Exercises
  • Chapter 10 Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics
    • Preview
    • The Federal Reserve's Balance Sheet
    • The Market for Reserves and the Federal Funds Rate
    • INSIDE THE FED: Why Does the Fed Need to Pay Interest on Reserves?
    • CASE: How the Federal Reserve's Operating Procedures Limit Fluctuations in the Federal Funds Rate
    • Tools of Monetary Policy
    • Discount Policy
    • Reserve Requirements
    • INSIDE THE FED: Federal Reserve Lender-of-Last-Resort Facilities During the 2007–2009 Financial Crisis
    • Monetary Policy Tools of the European Central Bank
    • The Price Stability Goal and the Nominal Anchor
    • Other Goals of Monetary Policy
    • Should Price Stability Be the Primary Goal of Monetary Policy?
    • Inflation Targeting
    • GLOBAL: The European Central Bank's Monetary Policy Strategy
    • Disadvantages of Inflation Targeting
    • INSIDE THE FED: Chairman Bernanke and Inflation Targeting
    • Central Banks' Response to Asset-Price Bubbles: Lessons from the 2007–2009 Financial Crisis
    • Tactics: Choosing the Policy Instrument
    • THE PRACTICING MANAGER: Using a Fed Watcher
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
    • Web Appendices
• PART FIVE: FINANCIAL MARKETS
  • Chapter 11 The Money Markets
    • Preview
    • The Money Markets Defined
    • The Purpose of the Money Markets
    • Who Participates in the Money Markets?
    • Money Market Instruments
    • CASE: Discounting the Price of Treasury Securities to Pay the Interest
    • MINI-CASE: Treasury Bill Auctions Go Haywire
    • GLOBAL: Ironic Birth of the Eurodollar Market
    • Comparing Money Market Securities
    • Liquidity
    • FOLLOWING THE FINANCIAL NEWS: Money Market Rates
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 12 The Bond Market
    • Preview
    • Purpose of the Capital Market
    • Capital Market Participants
    • Capital Market Trading
    • Types of Bonds
    • Treasury Notes and Bonds
    • CASE: The 2007–2009 Financial Crisis and the Bailout of Fannie Mae and Freddie Mac
    • Municipal Bonds
    • Corporate Bonds
    • Financial Guarantees for Bonds
    • Current Yield Calculation
    • Finding the Value of Coupon Bonds
    • Investing in Bonds
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 13 The Stock Market
    • Preview
    • Investing in Stocks
    • Computing the Price of Common Stock
    • How the Market Sets Security Prices
    • Errors in Valuation
    • CASE: The 2007–2009 Financial Crisis and the Stock Market
    • CASE: The September 11 Terrorist Attack, the Enron Scandal, and the Stock Market
    • Stock Market Indexes
    • MINI-CASE: History of the Dow Jones Industrial Average
    • Buying Foreign Stocks
    • Regulation of the Stock Market
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 14 The Mortgage Markets
    • Preview
    • What Are Mortgages?
    • Characteristics of the Residential Mortgage
    • CASE: The Discount Point Decision
    • Types of Mortgage Loans
    • Mortgage-Lending Institutions
    • Loan Servicing
    • E-FINANCE: Borrowers Shop the Web for Mortgages
    • Secondary Mortgage Market
    • Securitization of Mortgages
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 15 The Foreign Exchange Market
    • Preview
    • Foreign Exchange Market
    • FOLLOWING THE FINANCIAL NEWS: Foreign Exchange Rates
    • Exchange Rates in the Long Run
    • Exchange Rates in the Short Run: A Supply and Demand Analysis
    • Explaining Changes in Exchange Rates
    • CASE: Changes in the Equilibrium Exchange Rate: An Example
    • CASE: Why Are Exchange Rates So Volatile?
    • CASE: The Dollar and Interest Rates
    • CASE: The Subprime Crisis and the Dollar
    • CASE: Reading the Wall Street Journal: The "Currency Trading" Column
    • FOLLOWING THE FINANCIAL NEWS: The "Currency Trading" Column
    • THE PRACTICING MANAGER: Profiting from Foreign Exchange Forecasts
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 15 Appendix: The Interest Parity Condition
    • Comparing Expected Returns on Domestic and Foreign Assets
    • Interest Parity Condition
  • Chapter 16 The International Financial System
    • Preview
    • Intervention in the Foreign Exchange Market
    • INSIDE THE FED: A Day at the Federal Reserve Bank of New York's Foreign Exchange Desk
    • Balance of Payments
    • GLOBAL: Why the Large U.S. Current Account Deficit Worries Economists
    • Exchange Rate Regimes in the International Financial System
    • GLOBAL: The Euro's Challenge to the Dollar
    • GLOBAL: Argentina's Currency Board
    • GLOBAL: Dollarization
    • CASE: The Foreign Exchange Crisis of September 1992
    • THE PRACTICING MANAGER: Profiting from a Foreign Exchange Crisis
    • CASE: Recent Foreign Exchange Crises in Emerging Market Countries: Mexico 1994, East Asia 1997, Brazil 1999, and Argentina 2002
    • CASE: How Did China Accumulate Over $2 Trillion of International Reserves?
    • Capital Controls
    • The Role of the IMF
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
    • Web Appendices
• PART SIX: THE FINANCIAL INSTITUTIONS INDUSTRY
  • Chapter 17 Banking and the Management of Financial Institutions
    • Preview
    • The Bank Balance Sheet
    • Basic Banking
    • General Principles of Bank Management
    • THE PRACTICING MANAGER: Strategies for Managing Bank Capital
    • CASE: How a Capital Crunch Caused a Credit Crunch in 2008
    • Off-Balance-Sheet Activities
    • CONFLICTS OF INTEREST: Barings, Daiwa, Sumitomo, and Societé Generale: Rogue Traders and the Principal–Agent Problem
    • Measuring Bank Performance
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 18 Financial Regulation
    • Preview
    • Asymmetric Information and Financial Regulation
    • GLOBAL: The Spread of Government Deposit Insurance Throughout the World: Is This a Good Thing?
    • GLOBAL: Whither the Basel Accord?
    • MINI-CASE: Mark-to-Market Accounting and the 2007–2009 Financial Crisis
    • MINI-CASE: The 2007–2009 Financial Crisis and Consumer Protection Regulation
    • E-FINANCE: Electronic Banking: New Challenges for Bank Regulation
    • GLOBAL: International Financial Regulation
    • The 1980s Savings and Loan and Banking Crisis
    • Federal Deposit Insurance Corporation Improvement Act of 1991
    • Banking Crises Throughout the World in Recent Years
    • The Dodd-Frank Bill and Future Regulation
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
    • Web Appendices
  • Chapter 19 Banking Industry: Structure and Competition
    • Preview
    • Historical Development of the Banking System
    • Financial Innovation and the Growth of the Shadow Banking System
    • E-FINANCE: Will "Clicks" Dominate "Bricks" in the Banking Industry?
    • E-FINANCE: Why Are Scandinavians So Far Ahead of Americans in Using Electronic Payments and Online Banking?
    • E-FINANCE: Are We Headed for a Cashless Society?
    • MINI-CASE: Bruce Bent and the Money Market Mutual Fund Panic of 2008
    • THE PRACTICING MANAGER: Profiting from a New Financial Product: A Case Study of Treasury Strips
    • Structure of the U.S. Commercial Banking Industry
    • Bank Consolidation and Nationwide Banking
    • E-FINANCE: Information Technology and Bank Consolidation
    • Separation of the Banking and Other Financial Service Industries
    • MINI-CASE: The 2007-2009 Financial Crisis and the Demise of Large, Free-Standing Investment Banks
    • Thrift Industry: Regulation and Structure
    • International Banking
    • Summary
    • Key Terms
    • Questions
    • Web Exercises
  • Chapter 20 The Mutual Fund Industry
    • Preview
    • The Growth of Mutual Funds
    • Mutual Fund Structure
    • CASE: Calculating a Mutual Fund's Net Asset Value
    • Investment Objective Classes
    • Fee Structure of Investment Funds
    • Regulation of Mutual Funds
    • Hedge Funds
    • MINI-CASE: The Long Term Capital Debacle
    • Conflicts of Interest in the Mutual Fund Industry
    • CONFLICTS OF INTEREST: Many Mutual Funds Are Caught Ignoring Ethical Standards
    • CONFLICTS OF INTEREST: SEC Survey Reports Mutual Fund Abuses Widespread
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 21 Insurance Companies and Pension Funds
    • Preview
    • Insurance Companies
    • Fundamentals of Insurance
    • MINI-CASE: Insurance Agent: The Customer's Ally
    • Growth and Organization of Insurance Companies
    • Types of Insurance
    • CONFLICTS OF INTEREST: Insurance Behemoth Charged with Conflicts of Interest Violations
    • THE PRACTICING MANAGER: Insurance Management
    • CONFLICTS OF INTEREST: The AIG Blowup
    • Pensions
    • CONFLICTS OF INTEREST: The Subprime Financial Crisis and the Monoline Insurers
    • Types of Pensions
    • MINI-CASE: Power to the Pensions
    • Regulation of Pension Plans
    • The Future of Pension Funds
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 22 Investment Banks, Security Brokers and Dealers, and Venture Capital Firms
    • Preview
    • Investment Banks
    • FOLLOWING THE FINANCIAL NEWS: New Securities Issues
    • Securities Brokers and Dealers
    • MINI-CASE: Example of Using the Limit-Order Book
    • Regulation of Securities Firms
    • Relationship Between Securities Firms and Commercial Banks
    • Private Equity Investment
    • Private Equity Buyouts
    • E-FINANCE: Venture Capitalists Lose Focus with Internet Companies
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
• PART SEVEN: THE MANAGEMENT OF FINANCIAL INSTITUTIONS
  • Chapter 23 Risk Management in Financial Institutions
    • Preview
    • Managing Credit Risk
    • Managing Interest-Rate Risk
    • THE PRACTICING MANAGER: Strategies for Managing Interest-Rate Risk
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
  • Chapter 24 Hedging with Financial Derivatives
    • Preview
    • Hedging
    • Forward Markets
    • THE PRACTICING MANAGER: Hedging Interest-Rate Risk with Forward Contracts
    • Financial Futures Markets
    • FOLLOWING THE FINANCIAL NEWS: Financial Futures
    • THE PRACTICING MANAGER: Hedging with Financial Futures
    • MINI-CASE: The Hunt Brothers and the Silver Crash
    • THE PRACTICING MANAGER: Hedging Foreign Exchange Risk with Forward and Futures Contracts
    • Hedging Foreign Exchange Risk with Forward Contracts
    • Hedging Foreign Exchange Risk with Futures Contracts
    • Stock Index Futures
    • MINI-CASE: Program Trading and Portfolio Insurance: Were They to Blame for the Stock Market Crash of 1987?
    • FOLLOWING THE FINANCIAL NEWS: Stock Index Futures
    • THE PRACTICING MANAGER: Hedging with Stock Index Futures
    • Options
    • THE PRACTICING MANAGER: Hedging with Futures Options
    • Interest-Rate Swaps
    • THE PRACTICING MANAGER: Hedging with Interest-Rate Swaps
    • Credit Derivatives
    • CASE: Lessons from the Subprime Financial Crisis: When Are Financial Derivatives Likely to Be a Worldwide Time Bomb?
    • Summary
    • Key Terms
    • Questions
    • Quantitative Problems
    • Web Exercises
    • Web Appendices
• Glossary
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