ECO 3223 Homework #4: Financial Markets and Institutions - Prof. Tina A. Carter, Assignments of Economics

Download ECO 3223 Homework #4: Financial Markets and Institutions - Prof. Tina A. Carter and more Assignments Economics in PDF only on Docsity! ECO 3223 Homework #4 There are 3 pages Due Friday, October 2, 2009 Matching Each one is worth 3.5 points 1. Derivatives __F___ 2. Long position __M___ 3. Short position __S___ 4. Bank Run __R___ 5. Purchasing Power Parity __V___ 6. Call Option __N___ 7. Put Option __G___ 8. Foreign Exchange Market ___W__ 9. Fixed-Rate Payer __C___ 10. Floating-Rate Payer __T___ 11. Payoff Method __A___ 12. Purchase and Assumption Method __J___ 13. Hedge __Q___ 14. Options __I___ 15. Seller of an option __H___ 16. Buyer of an option ___O__ 17. RBC Requirements ___D__ 18. Floating Exchange rates __U___ 19. Solvency __K___ 20. Liquidity __E___ 21. American Option __B___ 22. European Option __L___ 23. FDIC __P___ A. XWhere the FDIC pays off all the bank’s depositors (up to the limit) then sells all the bank’s assets to try to recover the amount paid out B. XOption that can be exercised any time up to the expiration date C. XIn an Interest Rate Swap, the party that agrees to pay a certain fixed interest rate to the other D. XThe bank’s capital divided by the bank’s risk-adjusted assets E. XThe bank has sufficient reserves and immediately marketable assets to meet depositors’ demand F. XFutures, Options and Swaps G. XA contract that gives the owner the right to sell a financial instrument at the exercise price H. XWhere you are obligated to buy or sell the financial instrument I. XContracts that give the purchaser the option, or right, to buy or sell an underlying financial instrument J. XWhere the FDIC finds a firm that is willing to take over the failed bank K. XThe value of the bank’s assets exceeds the value of its liabilities, a positive net worth L. XOption that can only be exercised on the expiration date M. XThe position where you agree to buy a financial asset N. XA contract that gives the owner the right to buy a financial instrument at the exercise price O. XWhere you have the choice whether to exercise the option or not P. XCongress’s response to the bank panics of the 1930’s Q. XTo engage in a financial transaction that reduces or eliminates risk R. XWhere depositors rush to convert their balances to cash S. XThe position where you agree to sell a financial asset T. XIn an Interest Rate Swap, the party that makes payments based on some reference rate, such as the T-Bill U. XRates are allowed to fluctuate with changes in supply and demand V. XExchange rates between any two currencies will adjust to reflect changes in the price levels of the two countries W. XAn over-the-counter market conducted through electronic telecommunication