Money, Banking and Financial Markets
Format: PDF / Kindle (mobi) / ePub
Cecchetti & Schoenholtz's Money, Banking, and Financial Markets stays relevant and interesting through the text's unique emphasis on the Five Core Principles, the early introduction of risk, an integrated global perspective, and the integration of FRED data in the text and problem material. By focusing on the big picture via core principles, Cecchetti & Schoenholtz teaches students the rationale for financial rules and institutional structure so that even when the financial system evolves, students' knowledge will not be out of date. Be sure to visit the author blog at www.moneyandbanking.com for short, informed discussions on issues in the news, as well as technical points relevant for instructors and students alike.
Connect is the only integrated learning system that empowers students by continuously adapting to deliver precisely what they need, when they need it, and how they need it, so that your class time is more engaging and effective.
100. Corporate Debt Thousands of corporations in the United States issue bonds, and the bonds vary significantly in default risk (see the discussion of default risk on pages 152–154). In line with Core Principle 2, investors expect to be compensated for those risks. Table 6.3 captures a measure of that compensation— the yield spread over Treasury securities. The table shows the levels and one-day changes of yield spreads on actively traded corporate bond yields compared to a similar-maturity
THOSE $100 BILLS? A quick look at the Federal Reserve’s website, www. federalreserve.gov, tells us that during the winter of 2013, the public held nearly $1.2 trillion in the form of currency. That’s a huge amount. To get some sense of the size of this number, you can divide it by the U.S. population at that time, 315 million, to get roughly $3,700 per person. For a household of four, that’s an average of nearly $15,000 in cash. What’s even more absurd is that more than three-fourths of the $1.2
Chapters 1–8, 10–12, 15–19, and 20 This alternative to the general money and banking course substitutes chapters on foreign exchange and exchange-rate policy for the macroeconomic model included in courses with less international emphasis. Financial Markets and Institutions. Chapters 1–9, 11–18 The traditional financial markets and institutions course covers money, financial instruments and markets, financial institutions, and central banking. The focus is on Parts II and III of the book.
premiums, which they invest in securities and real estate (their assets) in return for promising compensation to policyholders should certain events occur (their liabilities). Life insurers protect against the risk of untimely death. Property and casualty insurers protect against personal injury loss and losses from theft, accidents, and fire. 3. Pension funds invest individual and company contributions in stocks, bonds, and real estate (their assets) in order to provide payments to retired
from the risk that it would suddenly disappear. But what? Cervantes answered this question in Don Quixote in 1605: “It is the part of a wise man to keep himself today for tomorrow, and not to venture all his eggs in one basket [emphasis added].” In today’s terminology, risk can be reduced through diversification, the principle of holding more than one risk at a time. Though it may seem counterintuitive, holding several different investments can reduce the idiosyncratic risk an investor bears. A