What is sovereign risk and what is the difference between rescheduling and repudiation? What is total debt service ratio and how is it calculated? Find the total debt service ratio of a country. See if you can also find an example of a country, or countries, that Western banks currently have exposure to.

Does the Fed have complete control over U.S. interest rates? That is, can it set ratesat any level it chooses? Why or why not?

Financial instruments are assets that have a monetary value or record a monetary transaction. To coordinate the exchange of capital between borrowers and lenders, financial instruments trade in the financial markets. These financial instruments can be categorized on the basis of their issuers, maturity, risk, and other factors. Identify the financial instruments based on the following descriptions. Backed by the U.S. government, these financial instruments are short-term debt obligations with a maturity of less than one year. They are considered risk-free investments.  State and local government bonds, U.S. Tresury, U.S. Tresury notes and bonds Issued by money-centered financial firms, these short- or medium-term insured debt instruments pay higher interest than a regular savings account. They are low-risk instruments and have low returns.     Money Market Mutual Funds, Certificates of Deposit, Commercial Paper These financial instruments are investment pools that buy such…

6. How does the deposit insurance help the depositors? What are the pitfalls of the scheme? Can it help stabilizing Hong Kong dollar exchange rate in the face of regional and global financial crises?