Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
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Chapter 11, Problem 2DAP
To determine

  1. When did assets start entering money market mutual funds? What was the total worth of assets in money market mutual funds at the end of 1970?
  2. For each decade period, calculate the total percentage change in assets from the beginning of the decade to the end of the decade: 1980:01—1990:01: 1990:01—2000:01 2000: Q1-2010: Q1. For each decade period, divide the total percentage change by 10 to get the average yearly percentage increase. Which decade had the largest average yearly growth in money market mutual funds? 
  3. Calculate the growth rate from the most recent quarter of data available to the same quarter a year prior. How does this growth rate compare to the highest average yearly growth rate for the decades from part (b)? 

Concept Introduction:

Money market mutual funds provide the dual advantage of liquidity a well as security to financial intermediaries in the market. These funds were created in the year 1971 as a substitute of bank accounts, since the Regulation Q prohibited demand deposit accounts from giving interests.

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