...2 FIS 260 Week 3 Assignment: The Federal Reserve System FIS 260 Week 3 CheckPoint: The Fed Discount Rate and Federal Funds Rate FIS 260 Week 4 CheckPoint: The U.S. Treasury FIS 260 Week 4 DQs part 1 of 2 FIS 260 Week 4 DQs part 2 of 2 FIS 260 Week 5 CheckPoint: Development of the International Monetary System FIS 260 Week 5 Assignment: International Trade FIS 260 Week 6 CheckPoint: The Interest Rate FIS 260 Week 6 DQs part 1 of 2 FIS 260 Week 6 DQs part 2 of 2 FIS 260 Week 7 Assignment: Risk and Diversification FIS 260 Week 7 CheckPoint: Rates of Return FIS 260 Week 8 CheckPoint: Capital Budgeting FIS 260 Week 8 DQs part 1 of 2 FIS 260 Week 8 DQs part 2 of 2 FIS 260 Week 9 Capstone CheckPoint FIS 260 Week 9 Final Project: The Current Financial Environment Activity mode aims to provide quality study notes and tutorials to the students of FIS 260 COMPLETE CLASS in order to ace their studies. FIS 260 COMPLETE CLASS To purchase this visit here: http://www.activitymode.com/product/fis-260-complete-class/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIS 260 COMPLETE CLASS FIS 260 Week 1 Assignment: The Monetary System FIS 260 Week 1 CheckPoint: The Four Pillars and the Components of Finance FIS 260 Week 2 CheckPoint: Functions of the Banking System FIS 260 Week 2 DQs part 1 of 2 FIS 260 Week 2 DQs part 2 of 2 FIS 260 Week 3 Assignment: The Federal Reserve System FIS 260 Week 3 CheckPoint: The Fed Discount Rate and Federal...
Words: 503 - Pages: 3
...Concerns of Federal Reserve Raising Interest Rates Sharon Cordero Post University Abstract In the midst of a struggling economy were food and energy prices are rising and long-term US Treasury yields approached their highest levels since the start of the year, concerns about higher inflation, have compelled investors to scale back their buying of long-dated Treasuries and European government bonds. As rates rise, the present values of home prices will fall, creating less “equity” for homeowners. Therefore, consumers will be less willing and less able to buy. The Fed tries to indirectly influence other interest rates (especially the federal funds rate) by buying or selling U.S. Securities on a large scale. They do this by buying bonds in mass quantities. Concerns Over Raising Interest Rates The Federal Reserve is the central bank of the United States, created by an act of Congress in 1913. The Federal Reserve sets and enforces the specific legal reserve requirements. There are several well-known types of lending interest rates that the federal reserve and banks charge to banks and consumers and which affect the interest rates that we have to pay for autos or mortgage loans. The discount rate is the rate that the Federal Reserve Bank charges to banks and other financial institutions to borrow short-term funds directly from the central bank. (Heyne, 352) The discount rate affects the rates these financial institutions...
Words: 1152 - Pages: 5
...FEDERAL RESERVE • In 1913 the Federal Reserve Act was passed, establishing reserve requirements for those commercial banks that chose to become members. • There are 12 Districts across America • It earns most of its income in the form of interest on its holding on US. Government securities as well as providing services to financial institutions. • The income earned is transferred to the Treasury • It regulates commercial banks and conducts monetary policy, adjusting the money supply to achieve full employment and price stability ( low inflation) • Has five major components o Federal Reserve District Banks o Member Banks o Board of Governors o Federal Open Market Committee o Advisory Committees Federal Reserve District Banks • Federal Reserve District Cities: o 1. Boston, Massachusetts o 2. New York, New York (Most important District City) o 3. Philadelphia. Pennsylvania o 4. Cleveland, Ohio o 5. Richmond, Virginia o 6. Atlanta, Georgia o 7. Chicago, Illinois o 8.St. Louis, Missouri o 9. Minneapolis, Minnesota o 10. Kansas City, Kansas o 11. Dallas, Texas o 12. San Francisco, California • Commercial banks that become members must purchase stock in the FED • Each District has 9 members o 6 are elected by member banks in which 3 are professional bankers and 3 are engaged in business o The remaining 3 are appointed by the Board of Governors o All nine directors appoint their Fed district bank president • District banks facilitate...
Words: 1233 - Pages: 5
...impact on the economy. There were clues that the economy may have actually slightly contracted instead of expanding. “The United States economy reversed course in the final quarter of 2012 and contracted at a 0.1% rate and was the worst performance since the financial crisis in 2009.” (Mataconis, 2013) . Even with the overall contraction, the economy is not on the brink of a recession or an extended slump. Companies are still spending. The economy we have been living in since 2009 is going to be the new normal. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. The current prime rate is 3.25%, federal discount rate is 0.75%, fed funds rate is 0.25%, and the 11th District cost of funds is 1.071%. Changes made with federal funds rate and the discount rate also dictate changes in the Wall Street Journal prime rate, which is the interest to borrowers. (Bankrate.com, 2013) The current fixed interest rate for credit cards is 13.02% and for variable interest rate for credit cards are at 15.14%. “The unemployment rate falls to 7.8% as the economy creates 114,000 jobs.”...
Words: 559 - Pages: 3
...The Current Financial Environment FIS/260-Financial Markets & Institutions: You Can Bank On It Michael Ricks When I first took a look at this assignment I thought it would be easier than it this. I looked for days on the internet trying to find banks or depositories with credit cards with variable interest rates. What I found was many banks with many credits all with annual percentage rates (APR). So to keep my insanity I just looked at three commercial banks. I looked at Bank of America, US Bank, and Regions bank. I looked at all their credit cards student, business, rewards, and secured. Bank of America credit cards Apr varied anywhere from 12.99% to 20.99%. Here is how they get people, 0% introductory APR for the first 12 billing cycles only for purchases. When that cycle ends your rate will depend on your creditworthiness. US Bank does similar and their rates are from 11.99% to 23.99%. Regions is in the same neighborhood starting at 13.99%, 16.99%, or 19.99% based on credit, but can quickly climb to 24.99% or even 29.99%. Every bank I researched, including credit unions, all based the rate that you would receive on your creditworthiness when you open your account. After that, your APR will vary with the market based on the Prime Rate as set out in the Variable-Rate information section of your agreement. The current annual percentage rate (APR) for a new car can vary from bank to bank, amount to amount, and year to year. It is not something that is...
Words: 1653 - Pages: 7
...Concerns of Federal Reserve Raising Interest Rates Sharon Cordero Post University Abstract In the midst of a struggling economy were food and energy prices are rising and long-term US Treasury yields approached their highest levels since the start of the year, concerns about higher inflation, have compelled investors to scale back their buying of long-dated Treasuries and European government bonds. As rates rise, the present values of home prices will fall, creating less “equity” for homeowners. Therefore, consumers will be less willing and less able to buy. The Fed tries to indirectly influence other interest rates (especially the federal funds rate) by buying or selling U.S. Securities on a large scale. They do this by buying bonds in mass quantities. Concerns Over Raising Interest Rates The Federal Reserve is the central bank of the United States, created by an act of Congress in 1913. The Federal Reserve sets and enforces the specific legal reserve requirements. There are several well-known types of lending interest rates that the federal reserve and banks charge to banks and consumers and which affect the interest rates that we have to pay for autos or mortgage loans. The discount rate is the rate that the Federal Reserve Bank charges to banks and other financial institutions to borrow short-term funds directly from the central bank. (Heyne, 352) The discount rate affects the rates these financial institutions...
Words: 1152 - Pages: 5
...Wall Street Journal Project List of Articles * Deal Trips Up Caterpillar in China * Shell Plans to Boost Exploration Budget * Nasdaq Faces Facebook Fine * SEC Freezes A Swiss Account Over Heinz Trades * Payroll Tax Whacks Spending * Fed Sticks to Script, Bank Goes Off * Advisers Help Decide When to Fire an Accountant * China Audits Demand Hong Kong Rigor * FASB Proposes to Amend Guidance on Discontinued Operations * Regulators Close Banks in Kentucky, Florida Deal Trips Up Caterpillar in China Tuesday, January 22nd, 2013 Last June, Caterpillar Inc. paid $700 million for ERA Mining Machinery Ltd. Ever since the purchase last June, Caterpillar hasn’t been doing so well in China. ERA’s value could be written down “by $580 million, blaming “deliberate, multiyear, coordinated accounting misconduct” that was designed to overstate profit at the unit before the deal.” If Caterpillar doesn’t end up doing well in China then it risks losing it’s higher ranking among other construction machinery. Caterpillar still has a few plans to try before giving in easily. Shell Plans to Boost Exploration Budget Friday, February 1st, 2013 Shell and many other oil companies, are planning on expanding the funding for exploration this year. The oil industry is a competitive market and all companies are constantly thriving to become on top. In order to replace declining oil reserves, Shell, and other oil companies are needing to use more of their...
Words: 1251 - Pages: 6
...Federal Reserve Monetary Policy ECO/372 University of Phoenix The American economy has been through Hell and back in the new millennium, and for some time economist speculated of the dismal circumstances to affect the U.S financial structure as a whole. This paper is going to highlight a variety of current macroeconomic indicators by specifically defining the objectives of the Federal Open Markets Committee and stating the economic projections for 2015 in hopes of painting a clear picture of the current financial state of the U.S economy. With growth reported in GDP and incomes this past year, there is still concern surrounding overall consumer opinions on the state of our nation’s economy. The results of the Michigan surveys index of consumer sentiment as included as well within the Monetary Policy (2014). This demonstrates the country continues to feel the economy is strengthening as well, as their overall confidence of their own financial situations. However, we are still well below average on the index report which also is reported without much change in the last year. Although we have improved our outlook since the recession that occurred in 2008, we remain guarded and safe in our observations. With slowly increasing consumer sentiment, housing starts continue to increase slowly along with our post housing bubble recession recovery (Monetary Policy, 2014). Single family and multifamily starts show a very slow trending increase but at a .6 high index for 2014...
Words: 1719 - Pages: 7
...September. Both index increases infer growing confidence and positive expectation in current policy. These data will translate to more spending in the aggregate leading to more employment with the probability of increased productivity to supply the demand for goods and services. Consumer Income The US Department of Commerce Bureau of Economic Analysis (BEA) reports personal income increased 0.2 percent for the month of September 2014, and disposable income rising 0.1 percent during the same period. Of note, personal expenditures dropped 0.2 percent equaling this increase. Tis effectively negates any positive contribution to aggregate demand, and in fact, has potential to create an over-supply of goods and services. Interest Rates The Federal Reserve reports no significant changes in key interest rates during the past three months. The...
Words: 420 - Pages: 2
...FIS 260 Week 9 Final Project The Current Financial Environment To Buy This material Click below link http://www.uoptutors.com/FIS-260/FIS-260-Week-9-Final-Project-The-Current-Financial-Environment Final Project: The Current Financial Environment Research and compare the following services provided by three different commercial banks or other depository institutions: the current interest charged on a variable credit card account, the current annual percentage rate for a new car, and the current interest rate on a year fixed mortgage. List the depository institutions and each separate rate. Research and answer the following questions: What is the current prime rate? What is the current federal funds rate? What is the current Fed discount rate? What is the current GDP? Discuss, in a 1,050- to 1,400-word analysis of your findings, the current financial situation, and explain in detail how the federal funds rate and discount rate are related to the prime rate, and how the prime rate in turn is related to the services provided by the banks you researched. Address the following points in particular: a. The date of the last federal funds rate increase or decrease b. The amount of the increase or decrease c. The rational behind the latest increase or decrease d. The effect of the increase or decrease on the overall economy and upon you as an individual. Do not include any specific personal financial data. Cite your sources. Post your analysis to the Assignment section as an...
Words: 258 - Pages: 2
...This summary of the most recent report of the Federal Reserve shows steady growth in regards to the strength of the economy, but slightly less aggressive than last year. It is noted that payroll employment has increased by 210,000 on average per month in comparison to 260,000 last year. The unemployment rate dropped by a quarter percent to 5.3 percent in June. It is estimated that labor market resources are not being fully utilized because part time employees looking for full time remains high even though slightly decreasing. Consumer price inflation remains below the FOMC’s goal of 2 percent. The price index of consumer spending increased a quarter percent since last May. This in part is affected by lowered gas prices. Long run inflation estimates have remained stable and real gross domestic product has been little changed since last year in this first quarter. It is expected that inflation will rise to the expected level in the near future. Longer-term interest rates have increased since last year and auto and student loan balances continue to grow higher. This seems similar to the increase in housing loans in the prior decade. Hopefully the amount of default loans will not arise from poor bundling packages. Borrowing by lower rated businesses has increases rapidly as well. It has maintained to implement a low rate for the Federal Funds rate varying from 0-.25 percent. It plans to raise the federal funds rate once employment figures are up to par and the inflation...
Words: 280 - Pages: 2
...risk premium can be an individual stock or the overall stock market provides over a risk-free rate. And the size of the premium will be a standard to compensate with a higher premium in the stock market. Thus, a portfolio manager when the equity risk premium increases in the future， the investors will sell out stock market because the stocks are over priced. So the legislators and pension administrators decide how much to set aside to meet future pension obligations, based upon assessments of equity risk premiums. However the history data of ERP (Equity Risk Premium) from Federal Reserve System shows it keeps low and stable state but increases suddenly since 2006. At the same time the Federal Funds Effective Rate goes down and keeps low state. We know that interest rate is a way to control inflation. Inflation is a factor causes too much money chasing too few goods. “Changes in the federal funds rate affect the behavior of consumers and businesses, but the stock market is also affected,” Said by Jim Mueller (2013), PhD Finance in Washington State University. “As the risk-free rate goes up, the total return required for investing in stocks also increases.” In other words, the "risk-free" rate of return goes up, making these investments more desirable. But is the low interest rate push the equity risk premium rate goes up?...
Words: 3534 - Pages: 15
...Federal Reserve’s Publication Describe the Federal Reserve’s assessment of the current economic activity and financial markets. The U.S macro economy experiencing a notable extended period of economic expansion led to people believing that the U.S’ economy had become less volatile and prone to recession. Our economy’s growth slowed significantly and was threatened to enter the first recession of the millennium in mid-2000. According to the Federal Reserve the situation of our economy can be viewed from two points of view. The first one suggests that the slowdown in our economy is temporary, short-lived, and reversible meaning its recovery can be “V-shaped.” The second one suggests that the recession will last longer, a more drawn out slowdown, and followed by a weaker and more sluggish recovery also called “U shaped” recovery. This later view is associated with asset price deflation as well as burdensome debt. The current economic activity appears to be moving on the right direction and reversing itself into a near-term recovery. Also another aspect of it is the signs of potential risk of longer-term casual factors at work. The suggestion based on the fragility of the economy is that policymakers must be prepared to react and further preventive steps should be considered. Explain the Federal Reserve’s current view about inflation. There are two types of inflation that are closely tied to each other. Monetary inflation is an increase in the money supply. Price inflation...
Words: 1356 - Pages: 6
...The Federal Reserve Bank As the United States moves towards a globally interdependent marketplace, the global monetary stakes have become much higher. The United States Congress established the Federal Reserve in the early 1900’s. A country’s debt can now become the world’s debt, and the role of the U.S. federal banking system is now considerably more under pressure and scrutiny than ever before. As we have been seeing with the current liquidity crisis in the U.S., and how it has affected U.K. and Asian markets, strong, comprehensive policy-making is now crucial to sustaining long-term economic viability. The American economy is a complex balance of services, financial, manufacturing, agricultural, and banking industries. For this reason, the U.S. is a global economy, relying upon foreign investments and trade to create and retain wealth. Over the years, America has evolved from farming-based, to industrial, to a services-based economy. As a result, the banking system from its inception has weathered the many growing pains associated with a new government and currency, instituting regulations and a centralized bank to examine the economy, and implementing policies intended to offset factors negatively affecting the general financial health of the country. Despite the growing need for quick, precise actions by the Federal Reserve System, the decision-making regarding the economy is often met with controversy. The recent bail out plan, passed by Congress...
Words: 2694 - Pages: 11
...To Foreign officials, The Federal Reserve Bank is the Central banking system of the United States of America. There are 12 Federal Reserve Banks in different districts throughout the U.S. The main focus of the Federal Reserve is to control the money supply, interest rates, and constantly supervise the overall banking systems ("Board Of Governors Of The Federal Reserve System," November 6, 2009). The Federal Reserve System was founded by congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Our duties and responsibilities are reflected through our mission statement and can be divided into four main categories: General areas of expertise We influence monetary and credit conditions in the economy in our quest for maximum employment, stable prices, and moderate long-term interest rates ("Board Of Governors Of The Federal Reserve System," November 6, 2009). We protect the credit rights of all the consumers in the economy. We Oversee and regulate banking institutions to guarantee the safety and soundness of the country's banking and financial system ("Board Of Governors Of The Federal Reserve System," November 6, 2009). We uphold the constancy of the entire financial system and contain systemic risks that may arise in all financial markets ("Board Of Governors Of The Federal Reserve System," November 6, 2009). We provide financial services to depository institutions, the U.S. government, and foreign...
Words: 733 - Pages: 3
