...Assignment Money and Banking Student Account, Pay Order, DD Submitted to: Sir Muhammad Sheikh Owais Submitted by: Iram Hameed Roll Number: BBD-07-02 Course: BBA (HONS). Session: 2007-2011 BBA 6th (Morning), Bahauddin Zakariya University Multan, Sub Campus, Dera Ghazi Khan. Date of submission: 28-03-2010 Money and Banking Walk into any bank in the country and you’ll quickly realize that there are a number of different types of bank accounts for you to choose from. There are bank accounts for single people, bank accounts for married people, and bank accounts for families. There are business bank accounts and there are even student bank accounts. Most students don’t realize that most banks have student bank accounts available that are a good fit for them, and those that do don’t know what their student bank accounts entitle them to. What Is A Student Bank Account? A student bank account is a bank account that’s set up by the bank for students only. This bank account is often designed for college students who have a low influx of money coming in and going out and is usually the best fit because it’s designed for ease of use for college students. Most of the time a student bank account will come with not only the ability to deposit and withdraw money, but a number of other perks, including a free ATM/Debit card, free checking, and a variety of other plusses. Requirement for Opening a Student Account ➢ Copy of CNIC of the Student ...
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...Money and Banking Prolonged Recession The reasoning behind why this country is experiencing a prolonged recessionary period is difficult to see because much of it is unseen. The problems with our deficit, unemployment, and growth are difficult concepts to see as an individual person, due to everyone seeing/being affected by a different aspect of it. It is hard to see the real problem and these anything we could want to test is even harder to attempt because it affects millions of Americans. If we were to look at Keynes theory as a way to solve our financial crisis we need to examine the stimulus effect on unemployment and growth. Keynes argued that demand determines overall economic activity and that low demand could cause prolonged periods of unemployment. Keynesians believe that the government should use fiscal and monetary tools to stimulate the effects of the recession. Hayek’s theory on the other hand is inferred to say that the federal government should make money as neutral as possible, like the rule of law, one that never favors one party or the other. Supporters of Hayek believe that more spending will not lead to economic recovery during a recession/depression. The facts: In 2009, the American Reinvestment and Recovery Act allowed for $787 billion (composed of three parts: Tax breaks for individuals and companies, Aid to states to fund unemployment benefits, Medicaid, and schools, and funding for infrastructure projects) and it was predicated that unemployment...
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...inclusion would improve it could reduce the cost of cash to Indian economy to one-third to the current level of 5%-7% of GDP. They could also make payments of economic goods such as oil, fertilizers ect and accessible to everyone even in rural areas. RBI has established regional rural banks and electronic payments facilities for everyone, to make it more easy and to reduce chances of miss-use government has issued a biometric identification number to every citizen. RDI has adopted a technology-based agent bank model through BC and BF to improve outrich. BF could make it easy to identification of borrower and recovery. RBI has prohibited cash out of mobile wallets. Regulation on Financial Inclusion Nov-05 Banks mandated to offer basic banking 'no-frills' account with 'nil' or very low minimum balance. Jan-06 Banks permitted to use not-for-profit BCs and BFs. Customer charging not permitted. Nov-09 Banks allowed to collect reasonable service charges from customers and pay BCs. Nov-09 Banks asked for a roadmap by March 2010 for making a plan outlining by when they would complete financial inclusion in their designated areas. Jan-10 Banks advised to develop a three-year Financial Inclusion Plan by March 2010. Apr-10 BC guidelines relaxed to allow ‘for profit’ companies to act a Jul-11 Banks to allocate at least 25% of new branches during a year to unbanked rural centers. Mar-12 A retail outlet would have the branding of the bank that had...
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...earn profits. First of all, market lacked the sufficient capacity to absorb such a great size of investment. Secondly, the high leverage made LTCM vulnerable to market fluctuations. After Russia default on its government-issued bonds, panicked investors flight to quality assets like the US Treasuries while selling the risky securities in which LTCM trade, and further prevented the price convergence which LTCM bet on. At this time when LTCM heavily relied on leverage, Bear Stearns stopped to act as a clearinghouse for the fund’s trades, further worsened the situation of LTCM. When other major investment banks were invited by Fed to finance LTCM, Bear Stearns was the only bank which refused to join. Moreover, right after the banks injected money into LTCM, Bear ended LTCM’s last hope by calling a $500 billion short-term debt to decrease its own risk. While trying to maintain order, Fed worried that if it set the precedent of a government bailout of a private fund, then other funds would have...
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...Chapter 15 Homework Solutions 2. During Christmastime, when the public’s holdings of currency increase, what defensive open market operations typically occur? An increase in currency holdings causes the currency ratio to rise and the money multiplier to fall. As a result, there will be a decrease in the money supply. To maintain the money supply, the Fed must make a defensive purchase of bonds on the open market, raising the monetary base to counter the decline in the multiplier. 6. “The only way the Fed can affect the level of borrowed reserves is by adjusting the discount rate.” Is this statement true, false, or uncertain? Explain your answer. This statement is false. The Fed could affect the level of borrowed reserves in two ways. First, they could directly limit the amount of discount loans an individual bank can take out. Second, they could reduce non-borrowed reserves to such a point that even with a fixed discount rate, borrowed reserves will rise, as outlined in the diagram below: In the diagram above, the Fed cuts non-borrowed reserves by making open-market sales of bonds. This causes the federal funds rate to rise above the discount rate, prompting banks to borrow from the Fed. As a result, the total reserves held by banks (R2) will be equal to NBR2 supplied by the Fed and reserved borrowed directly from the Fed (BR). 7. Using the supply and demand analysis of the market for reserves, show what happens to the federal...
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...Short Answer Questions In your own words, explain what a “bond” is. Assume the reader does not already know what a bond is. (15 points) A Bond is a debt security that promises to make periodic payments for a specific period of time. Further, a bond has a structured face value and yield, and is the obligation of the issuer to pay those in exchange for liquidity now. Governments and companies sell bonds and terms can range from overnight to infinity. What is the present value of a consol (aka perpetuity) that pays $10,000 per year? Use a discount rate of .99. Show your work. (15 points) 10,000/1-.99=10,000/.01=1,000,000 What is the relationship between bond yields and bond prices? (5 points) Why? (10 points) The relationship is inverse. Logically, they are inverse because the effective yield on the bond has to match the yield to maturity. The opportunity cost of holding the bond has to match market yields, so the price has to fall below face value if yields go up and vice versa. You purchase a $1,000, one-year term (simple) bond with an annual coupon yield of 2%. The next day, market yields rise to 3%. If you now want to sell the bond, what price do you expect to receive? (10 points) (Note: You do not have to calculate any specific numbers but can answer in the form of a mathematical expression.) What is the implied yield to maturity for the buyer at that price? (5 points) 1.02/1.03 x 1000= 990 I expect a lower price because the market yield is higher than the bond...
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...not whether inflation will ruin a nation, but how much inflation will ruin a nation. 0.00001% is still an inflationary number as is 1,000,000%. So it is not just the presence of inflation that will undermine a country’s financial system, but rather to what degree inflation impacts a country’s financial system. The original statement attributed to Vladimir Lenin that prompted this paper cannot be taken as a truism but it certainly fits in the Socialist propaganda. Will Inflation Undermine a Country’s Financial System and eventually ruin the Nation? It is easier to accept George Bernard Shaw’s statement: The lack of money is the root of all evil,” (Lawrence S. Ritter, 2009) than it is Lenin’s supposition that inflation, in a sense, is the root of all evil for a nation. To be certain, though, they are linked together. Inflation can lead to a lack of money and if it is bad enough, it can certainly be the ruin of a nation, or perhaps more succinctly: the ruin of a government. Inflation: how much is too much? This is a very debatable matter of how much is too much. To the uneducated masses, any is too much, and politicians pray on this ignorance for their personal gain. To the greedy there can never be too much. But the truth lies somewhere in between the ignorant and the greedy’s position on this subject. Some inflation is good, it is very good actually. How much is “good” is a point that even the world’s best economic minds cannot agree on and I don’t think we...
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...institutions •Insurance companies •Investment banks •Pension funds •Unit trusts and OEICs •Investment trusts Principal liabilities are not deposits FINANCIAL SERVICES Financial intermediation provided by all financial institutions Insurance and pensions provided by insurance companies and pension funds Payments provided by banks and building societies Portfolio adjustment provided by unit trusts, open-ended investment companies (OEICs) and investment trusts FINANCIAL MARKETS Definition: Financial markets are markets in which funds are transferred from those who have excess funds (savers, lenders) to those who have a shortage (investors, borrowers). Structure: Debt and Stock Markets Primary and Secondary Markets Money and Capital Markets 2 4/12/2012 DEBT AND STOCK MARKETS Debt market: the market for trading debt instruments Debt instruments: • A paper or an electronic obligation that enables an issuer to raise funds by promising to repay a lender in accordance with terms of a contract. • Short-term, intermediate-term, long-term debt instruments • E.g.: bonds, notes, certificates,… Stock market: The market in which shares/equities are issued and traded either through exchanges or over-the-counter...
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...1 of 9 Economics 310 Money and Banking Practice Midterm Exam Winter 2008 The actual midterm will involve only 25 multiple choice questions, to be completed in 80 minutes. No calculators, no cell phones, no personal digital media players or any other electronic equipment should be visible or in use during the exam. Each question will score 4 points if correct, 1 point if unanswered and 0 points if incorrect. This means that your final exam score will lie between 0 and 100, but that you can score 25 points simply by turning in a blank exam. It also means that a complete guess will score 4 points with probability ¼ and 0 points with probability ¾. On average, such a guess will score 1 point, which is exactly what you would get if you didn’t bother answering in the first place. 2 of 9 1. Which of the following is not commonly identified as a role of money? (a) (b) (c) (d) Money is a store of value Money is a unit of account Money avoids the need for a double coincidence of wants. Money counters the effects of Gresham’s Law. 2. Suppose the Fed looks to make an open market sale to the banking sector of $1 million worth of securities. If you were to trace the effects of this through the T-accounts for the Fed, the banking sector as a whole and the general public, which of the following would you observe? (a) (b) (c) (d) Bank reserves held at the Fed would increase by $1m. Bank reserves held at the Fed would decrease by more than $1m. Money supply would fall by more than...
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...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 is a sustained increase in the general level of prices, which is equivalent to a decline in the value or purchasing power of money. If the supply of money and credit increases too rapidly over many months (monetary inflation); the result will usually be price inflation. Price inflation does not always increase in direct proportion to monetary inflation; it is also affected by the velocity...
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...institution that manages the government's finances, controls the availability of money and credit in the economy, and serves as the bank to commercial banks. | | | | European Central Bank (ECB) | The central authority, located in Frankfurt, Germany, which oversees monetary policy in the common currency area. | | | | Federal Reserve System | The central bank responsible for monetary policy in the United States. | | | | Financial institutions | Firms, such as banks and insurance companies, that provide access to the financial markets, both to savers who wish to purchase financial instruments directly and to borrowers who want to issue them; also known as financial intermediaries. | | | | Financial instrument | The written legal obligation of one party to transfer something of value (usually money) to another party at some future date, under certain conditions. | | | | Financial market | The part of the financial system that allows people to buy and sell financial instruments quickly and cheaply. | | | | Financial system | The system that allows people to engage in economic transactions. It is composed of five parts: money, financial instruments, financial markets, financial institutions, and central banks. | | | | Information | A collection of facts. The basis for the third core principle of money and banking: Information is the basis for decisions. | | | | Markets | A virtual...
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...TB_599810_Mishkin_TP.qxd:Layout 1 6/4/09 9:45 AM Page 1 Test Bank to accompany Richard G. Stahl University of Texas, Arlington Louisiana State University Pearson Addison-Wesley Boston San Francisco New York London Toronto Sydney Tokyo Singapore Madrid Mexico City Munich Paris Cape Town Hong Kong Montreal p an rot d ect is e fo d b T r i y hi ns U s w tr S c o uc o rk to py is rs rig ’u h se t l on aw ly s . Kathy Kelly TB_599810_Mishkin_TP.qxd:Layout 1 6/4/09 9:45 AM Page 2 This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Acquisitions Editor: Noel Kamm Seibert Project Manager: Kerri McQueen Production Editor: Alison Eusden Manufacturing Buyer: Carol Melville Copyright© 2010, 2007, 2004, 2001 Pearson Education, Inc., 75 Arlington Street, Boston, MA 02116. Pearson Addison-Wesley. All rights reserved. Printed in the United States...
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...Kelcie Jeffries Money & Banking Mr. Foster March 8, 2014 How Technology has changed the Banking World over Time The ATM “In 1939, Luther Simjian patented an early and not-so-successful prototype of an ATM. However, some experts have the opinion that James Goodfellow of Scotland holds the earliest patent date of 1966 for a modern ATM, and John D White in the US is often credited with inventing the first free-standing ATM design. In 1967, John Shepherd-Barron invented and installed an ATM in a Barclays Bank in London. Don Wetzel invented an American made ATM in 1968. However, it wasn't until the mid to late 1980s that ATMs became part of mainstream banking” (Bellis). Although we can see that it is not clear on who invented the ATM, I think they all played an important role in developing what we have in today’s world. Don Wetzel was the most recent with installing one of the first ATMs in American and him and two other men invented what we know as today as the ATM card. The ATM made its first showcase on the outside at the Rockville Center, New York Chemical Bank. Also, another interesting fact I learned about this first ATM was that it only gave you cash it did not tell you your balance or let you transfer funds like we can at today’s ATM. “The ATM we know today was later installed and invented in 1971 and was called the total teller” (Bellis). During this era not every customer could have the right to an ATM card, banks would only let credit card holders have access...
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...Taylor ECO320 Money & Banking March 2, 2014 Prof. Diana Bonina, Ph.D. Strayer University The Federal Reserve established on December 23, 1913 when President Woodrow Wilson signed the Federal Reserve Act into law. Although started in 1913, actual operations of the Reserve began in 1914. In order to provide the country with a safer financial system, Congress created The Federal Reserve System as the central bank of the United States. Today, the Federal Reserve’s responsibility falls into four general areas: conducting the nation’s monetary policy; supervising, regulating and other soundness of the country’s financial system; maintaining the stability of the financial system and providing certain financial services to the U.S. government, U.S. financial institutions, and foreign official institutions. The Federal Reserve can use the following tools to influence the money supply: Open Market Operations, The Required-Reserve Ratio and Discount Rate. The Federal Reserve uses Open Market Operations as its primary tool to influence the supply of bank reserves. This tool consists of Federal Reserve purchases and sales of financial instruments, usually securities issued by the U.S. Treasury, Federal agencies and government-sponsored enterprises. Using Open Market Operations, Federal Reserve can affect the money supply by buying or selling the U.S. government securities. When the Federal Reserve purchases a government security from the public, it does so with money that did not...
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...Team members must hold at least three meetings to discuss the joint project, and you are required to record collective activities and individual activities as detailed as possible in your logbook. For individual activities, they must be endorsed by the other member. No free-riding for the group project is allowed. I reserve the right to read your logbook to identify each member’s contribution to the group work. After reading this article “How does the stock market affect the economy?” it is obvious that the main topic of this article is about the stock market and how it affects companies and households. There are two main ideas of the article which I will summarize in this paragraph. Stock price declines, especially those induced by profit warnings, increase shareholder pressure on managers to cut costs by laying off workers and scaling back investment. Second, a large stock price decline reduces the value of unexercised stock options, which falls as the gap narrows between a company’s stock price and the price at which workers can buy stock under an option. Third, the factors dragging down stock prices, such as a weaker or more uncertain profit outlook, may spur investors to demand higher risk premiums, which boosts the cost of financing business investment. A fourth way lower stock prices affect firms is that they will have less incentives to invest in new capital if there is a fall in the ratio (q) of the cost of buying existing capital to that of buying new capital. Lower...
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