S3 4.4 Flashcards
What was the beginning of the Commodities market?
All trades were cash and for immediate delivery = FWD contract
What type of commodities were the first Futures contracts on?
Agricultural goods
What needs led to the development of specialized markets in the 19th century?
1) Greater amount of K
2) Greater amount of credit
3) Method to cope with credit default
FRB
Federal Reserve Board
PPI
Producer Price Index
CPI
Consumer Price Index
Balance of Payments Surplus + Tightening of Money Supply = ?
Bullish effect on Dollar
What Policies affect Interest Rates?
1) Fiscal
2) Monetary
3) Money supply
What Does NOT affect Interest Rates?
Unemployment Rates
How are Federal Reserve Excess Reserves used?
By banks to Loan among themselves
How often do Treasury Bonds pay interest?
Semi-Annually
What has happened with the Maturity of government bonds over time?
Shifted from Long-term into Short-term
What Interest Curve do we get when short-term Yields are lower than long-term rates?
Positive Interest rate curve
What do banks do when short-term rates increase?
Increase issue of CDs
What is the` relationship between Loan Demand and CD issuing?
1) Greater demand for loans = More CDs issued
2) Less demand for loans = Less CDs issued
