he December 13, 2005, press release of the Federal Open Market Committee (FOMC) stated that it “decided today to raise its target for the federal funds rate by 25 basis points to 4¼ percent.” The press release also stated: “In a related action, the Board of Governors unanimously approved a 25-basis point increase in the discount rate to 5¼ percent.” (Note: A basis point is one one-hundredth of a percentage point. So, there are 100 basis points in 1 percentage point.)     a. Using a graph of the federal funds market, show the equilibrium federal funds rate and the discount rate before the policy action of December 13, 2005, when the federal funds rate was 4% and the discount rate was 5%.     b. Use your graph from part (a) to explain how the Fed would raise the federal funds rate by 25 basis points (¼%). Show in your graph the 25-basis-point increase in the discount rate. What policy action would the Fed use to bring about this increase in the target federal funds rate?

11. If a yield curve looks like the one shown in the figure below, what is the market predicting about the movement of future short-term interest rates? What might the yield curve indicate about the market's predictions for the inflation rate in the future? Yield to Maturity Term to Maturity

DARNELL: Hi, Felix. I would like to ask you about leverage. The Professor was talking about the advantages and disadvantage of banks using leverage. From what I understand, high bank leverage was one of the key ingredients in the housing bubble and the financial crisis that followed. What I do not understand is that, if leverage is so risky, why wouldn't the government just forbid banks from using leverage at all and thus eliminate the possibility of such a crisis in the future? FELIX: Darnell, this is not an easy question. Regulators and bankers are still searching for strategies that would benefit both investors and bank customers. I'll try to help you understand the trade-off of using leverage versus abandoning it completely. But first, let's make sure you understand what leverage is. DARNELL: In banking, leverage means that banks can use Increase the potential return on reserves to purchase assets that offer higher returns and thus deposits reserves stockholders' equity FELIX:…

18) If a bank has $100 million in total assets with $40 million in rate-sensitive assets, and $90 million in total liabilities with $50 million in rate-sensitive liabilities, then what will happen to the net interest margin (NIM) if interest rates rise by 5 percentage points, say from 10 to 15%? A) increase by 2% C) decline by $0.5 million B) decline by 0.5% D) increase by $2 million

Graphically explain (using both bond market and money market graphs) what is the impact on interest rates when the Federal Reserve decreases the money supply by selling bonds to the public?

Only part b   Select one or more  Please asap.

The table below shows current and expected future one-year interest rates, as well as current interest rates on multiyear bonds. Use the table to calculate the liquidity premium for each multiyear bond. One-Year Bond Year Rate 1 2.00% 2 4.00% 3 5.00% 4 8.00% 5 11.00% Multiyear Bond Rate 2.00% 5.00% 7.00% 9.00% 10.00% The liquidity premiums for each year are given as: (Enter your responses rounded to two decimal places.) 11 = 0% 21 = 131 = 55 141 = = % do do do do % % %

2) What are two features, characteristics, or practices of the Bank of Japan to compare with the FED that are very similar to the FED?

4*******************   4)Why did the Financial Crisis and the Great Recession cause the FED to alter its monetary policy from using open market operations to target the federal funds rate to establishing a corridor between the IOER and the discount rate through which the federal funds rate would move over time?

6-9 please