PART 1 1. Choose three economic indicators one of each type (leading, lagging, and coincident).

Define the measure, explain the timing and source of reporting, provide current measure and trend over the last year.

2. Which financial statement shows the amount of onds and money mar!et instruments a company has issued or invested in"

#. $n most current financial statement from %uestion &2 ' what are the dollar amounts of onds and money mar!et securities that (ma)on has issued" *ow much has (ma)on invested in money mar!ed securities" PART 2 +ind out which onds (ma)on has outstanding and share info a out five of these ond issues ased on info in the annual report. $nfo should include, $ssue Date, $ssue -i)e, $nitial .erm, /emaining .erm, and Coupon rate.

What is the approximate si)e of the 0ond 1ar!et and the 1oney 1ar!ets" +or comparison, how large is the e%uity mar!et" What are reasons for the significant difference" PART 3

1. 2et3s thin! a out factors that can influence each of these components, give at least one factor that affects each of the following, a. /is! free rate . $nflation premium c. Default ris! premium d. 2i%uidity premium e. 1aturity ris! premium

2. *ow does collateral affect the interest rate on a ond" *ow does su ordination affect the interest rate on a ond too"

#. Which financial statement is used to determine outstanding de t ( onds)" What ond issues does (ma)on have outstanding (from annual report details)" 4rovide characteristics, features, and provisions of different ond issues from (ma)on .

5. What are the primary ond categories and how do they differ" Assignment 3 Chapter 4 1. .he +ed 0riefly descri e the origin of the +ederal /eserve -ystem. Descri e the functions of the +ed district an!s.

6. 0eige 0oo! What is the 0eige 0oo!, and why is it important to the +71C"

18. 9ffect on 1oney -upply Why do the +ed:s open mar!et operations have a different effect on the money supply than do transactions etween two depository institutions"

16. .he +ed:s $mpact on *ome 4urchases 9xplain how the +ed influences the monthly mortgage payments on homes. *ow might the +ed indirectly influence the total demand for home y consumers" chapter 5 1. $mpact of 1onetary 4olicy *ow does the +ed:s monetary policy affect economic conditions"

2. .rade'offs of 1onetary 4olicy Descri e the economic trade'off faced y the +ed in achieving its economic goals. 5. (ctive 1onetary 4olicy Descri e an active monetary policy. 6. 4assive 1onetary 4olicy Descri e a passive monetary policy. 28. $mpact of $nflation .argeting y the +ed (ssume that the +ed adopts an inflation targeting strategy. Descri e how the +ed:s monetary policy would e affected y an a rupt 16 percent rise in oil prices in response to an oil shortage. Do you thin! an inflation targeting strategy would e more or less effective in this situation than a strategy of alancing inflation concerns with unemployment concerns" 9xplain. 25. 1onetary 4olicy during the Credit Crisis During the credit crisis, the +ed used a stimulative monetary policy. Why do you thin! the total amount of loans to households and usinesses did not increase as much as the +ed had hoped" (re the lending institutions to lame for the relatively small increase in the total amount of loans extended to households and usinesses"

Assignment 4 Chapter 6 1. 4rimary 1ar!et 9xplain how the .reasury uses the primary mar!et to o tain ade%uate funding. 2. .'0ill (uction *ow can investors using the primary .' ill mar!et e assured that their id will e accepted" Why do large corporations typically ma!e competitive ids rather than noncompetitive ids for .' ills" #. -econdary 1ar!et for .'0ills Descri e the activity in the secondary .' ill mar!et. *ow can this degree of activity enefit investors in .' ills" Why might a financial institution sometimes consider .' ills as a potential source of funds" 5. Commercial 4aper Who issues commercial paper" What types of financial institutions issue commercial paper" Why do some firms create a department that can directly place commercial paper" What criteria affect the decision to create such a department" ;. <egotia le CDs *ow can small investors participate in investments in negotia le certificates of deposits (<CDs)" Chapter 7 1. 0ond $ndenture What is a ond indenture" What is the function of a trustee with respect to the ond indenture" 2. -in!ing'+und 4rovision 9xplain the use of a sin!ing'fund provision. *ow can it reduce the investor:s ris!" #. 4rotective Covenants What are protective covenants" Why are they needed" 5. Call 4rovisions 9xplain the use of call provisions on onds. *ow can a call provision affect the price of a ond" 6. 0ond Collateral 9xplain the use of ond collateral, and identify the common types of collateral for onds. =. De entures What are de entures" *ow do they differ from su ordinated de entures" ;. >ero'Coupon 0onds What are the advantages and disadvantages to a firm that issues low' or )erocoupon onds" ?. @aria le'/ate 0onds (re varia le'rate onds attractive to investors who expect interest rates to decrease" 9xplain. Would a firm that needs to orrow funds consider issuing varia le'rate onds if it expects that interest rates will decrease" 9xplain. A. Converti le 0onds Why can converti le onds e issued y firms at a higher price than other onds"

11. $mpact of Credit Crisis on Bun! 0onds 9xplain how the credit crisis affected the default rates of Cun! onds and the ris! premiums offered on newly issued Cun! onds. Assignment 5 Chapter 8 1. 0ond $nvestment Decision 0ased on your forecast of interest rates, would you recommend that investors purchase onds today" 9xplain. 2. *ow $nterest /ates (ffect 0ond 4rices 9xplain the impact of a decline in interest rates on, a. (n investor:s re%uired rate of return. . .he present value of existing onds. c. .he prices of existing onds.