Econ Money And Banking

A) A bank makes a 30-year owe loan to a household The bank is a pecuniary Intermediary, because it borrows from s confirms and loans it to borrowers. b) This would as well as be the simple grocery for the mortgage loan, as this is where it is low gear made. B) The bank sells a mortgage loan to a government-sponsored financial intermediary. a) This is another modeling of a financial intermediary, as state in the description. This would be a secondary market, because the loan already exists. C) ABC company opens for seam by selling sh bes of stocks to 10 private investors. a) This would be an type of something that relies on a financial market as it is the coach sale of new stocks straightway to investors, making it also a primary market. Given the succeeding(a) two investments, which whiz do you choose? For A at that place is an annual rice beer sepa step set out of about 5.4 percent pertain. (1+.3)= (1+i)^(5) = 5?1.3= 1.05387 For B we lecture an annual interest regularize of about 6.2 percent, (1+.005)^(12)=1.06168. I Would go with option B because it has a hire annual interest rate and over the equal five year stopover would have a full return of about a 35%. A.) The coupon rate is 2.875 b.) Bid 110.3594Asked 110.4063 C.

) The transactions would hail me $469 110.3594 -110.4063=--0.0469*$10,000= ($469) D) $312 previous asked: 110.4375- 110.4063=.0312*10,000 . The bond would be worth 10,000. B. The bond would be worth $10,354.60 C. The bond would be worth 10,272.32 5. A. 12.9% B. 11.7% .2(.3(1000)-.129(1000))^(2)+.7(.12(1000) )-.129(1000))^(2)+.1(-.15(1000) )-.129(1000))^(2) ?13689=(117)/1000=. 117 C. 4.7% 11.7%-7%=4.7% 6. A. NoRisk Co, The is no risk of loss. B. A risk-neutral psyche would chose both Norisk and Lowrisk as they are only concerned with rate of return, both of which are positive. C. No they would not. As they have the aforesaid(prenominal) return they would be awaken in the risk,...If you want to outfox a full essay, aver it on our website: Ordercustompaper.com

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