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- If a French citizen deposits $10,000 in Chase Bank inNew York, have Eurodollars been created? What if the deposit is made inBarclays Bank in London? Chase’s Paris branch? Does the existence of theEurodollar market make the Federal Reserve’s job of controlling U.S. interest rates easier or more difficult? Explain.1 True or False: The London Interbank Offered Rate (LIBOR) is published under the auspices of the British Bankers Association. A panel of 16 major multinational banks self-report their actual borrowing rate. The answer is FALSE. Please explain why.Suppose the Swiss government imposes an interest rate ceiling on Swiss bank deposits. What is the likely effect on Eurofranc interest rates of this regulation?
- Which of the following are issued by large commercial banks that can be bought and sold among investors and carry a fixed interest rate? a. Eurodollar CD O b. Certificate of Deposits c. Commercial Papers d. Treasury BillsWhat is a eurodollar? If a French citizen deposits $10,000 in Chase Manhattan Bank in NewYork have eurodollars been created? What if the deposit is made in Barclay’s Bank in London?In Chase Manhattan’s Paris branch? Does the existence of the eurodollar market make theFederal Reserve’s job of controlling U.S. interest rates easier or more difficult? Explain.The National Bank of Kazakhstan charges a discount interest rate on emergency loans to commercial banks. At one time, the National Bank set this interest rate beneath the base interest rate, which is the benchmark interest rate in Kazakhstan’s economy. But the National Bank now sets the discount rate equal to the base rate. Why might this have been prudent?
- The refinancing rate is the interest rate a central bank like the Bank of England or European Central Bank (ECB) charges on short-term loans to the banking sector. Which of the following statements about the refinancing rate are true? Check all that apply. If the central bank wants to contract the monetary supply, it raises the refinancing rate. A lower refinancing rate discourages banks from borrowing reserves and making loans. O To meet their liquidity requirements, banks agree to repurchase assets put up as collateral for loans from the central bank. The refinancing rate is a primary barometer of central bank policy reported in the media.You are a senior financial analyst and have been asked to analyse recent developments in the Euro era and the U.S markets and advise the top management on the economic conditions in both markets. You have collected data on the euro area yields of the central government bonds and the U.S. treasury bond yields. For this purpose, you have downloaded the following data from the European Central Bank and the U.S Federal Reserve Bank on 23rd April 2021 (Mo = month, Yr = Year): 23/04/2021 Euro area Central U.S. Treasury Time to Maturity Government Bond Yield Rates Bond Yield Rates 1 Мо З Мо 6 Мо 1 Yr 2 Y 3 Yr 4 Y 5 Y 7 YL 10 Yr 20 Yr 30 Y -0.50% -0.62% -0.65% -0.70% 0.08% 0.10% 0.11% 0.12% 0.14% -0.74% -0.74% -0.72% -0.63% -0.51% -0.17% -0.05% 0.20% 0.27% 0.46% 0.67% 1.19% 1.40% REQUIRED: a) Considering both yield rates on 23rd April 2021, depict the yield curves charts and describe the implied market outlook in the Euro area and the U.S. market to the top management.1. At any given time, the bank will purchase foreign exchange currency at what cost? a. market price b. client's selling price c. lower than the selling price 2. A bond call price amount is a. lower than par value b. higher than par value c. lower than discount value
- If interest rates are expected to fall in the future, a hawkish fed will a. Sell treasury bonds to constrict money supply b. Increase deposit requirements c. Allow a recession to happen ? С. d. Add credit to its member banks7- which of the statements given below is true? Please select one; a) every financial market allows loans to be made b) The New York Stock Exchange is an example of a primary market c) the capital market is a financial market in which only short term debt instruments (generally those with an original maturity of less than one year) are traded d) a pansion fund is not a contractual savings instution e) in the US financial intermediaries are restricted in what they are allowed to do and what assets m m they can holdL A Moving to another question will save this response. Question 1 Which of the following statements is (are) true? (i) Bank certificates of deposits are capital market instruments. (ii) A dollar-denominated deposit at a Chinese bank located in Japan is called Eurodollar. (iii) An overnight repurchase agreement is similar to an overnight collateralized loan. O (i) and (iii) only (ii) and (iii) only (i) and (ii) and (iii) O (i) and (ii) only A Moving to another question will save this response.