Reference no: EM132417677

Assignment: 1. Assume an investor puts $2000 into an investment that will pay $3200 one - fourth of the time, $2000 one - half of the time and $1750 the rest of the time. What is the investor's expected return? (show your calculations)

2. Who makes up the voting members of the federal reserve's open market committee?

3. When placing an order in the stock market you must indicate the stock you wish to trade, whether you want to buy or sell as well as the number of shares. You have a choice of placing a market or limit order. Briefly explain the difference between these two options.

4. The required reserve rate set by the Fed is ten percent of all checkable deposits. A bank sells $1 million of U.S. Treasury securities it owns to the Fed. Describe what this transaction does to the banks total reserves, its required reserves and tis excess reserves.

5. You are provided with the following information: a bank has a net profit after taxes of $3.5 million; it has assets of $150 million; and bank capital of $ 12.5 million. What is the bank's return on assets; its return on equity, and debt-to-equity, and its debt-to-equity ratio. (show your calculations)

6. If the Federal Reserve sells euros valued at $ 100 million to commercial banks, will this changer the Fed's liabilities and assets? Explain.

7. If time has value, why are financial institutions willing to extend you a 30 year mortgage at a lower annual interest rate than they would charge you for a two year consumer loan?