Interest rate parity, Corporate Finance

Assignment Help:

Explain what caused "the long boom" in the U.S. and world economy from the early 1980s to its peak in 2006.  Make sure to mention, with a few key facts in each case, the role played by (a) advances in information-processing technologies, (b) specific government deregulation of financial markets, (c) psychological and social factors.  Also, how in hindsight would you justify that it was an unsustainable boom?-what key statistics and trends were indicators of an obviously unsustainable boom?

In your own words, as if to a 'person on the street' who hasn't had much economics, define "interest rate parity."  Explain, to this same person, why interest rate parity might be the most important governing logic of how international financial markets work; in answering this later question you might want to explain how the life of the person "on the street" might be affected by the 'dominance' of interest rate parity processes, using examples.

Explain briefly what typically causes the boom (refer to your answer to question 2 if you like), turning point, and bust phases of a "severe financial crisis," and explain what typically happens with several major macroeconomic statistics during these phases.  Make sure "v" is one of the statistics chosen, and explain why "v" declined 25% during the fourth quarter of 2008-what does that decline represent?  Pick one of the severe crises that we have studied in the class (the current crisis if you like), and mention a few reasons why it does or doesn't fit these common historical patterns.


Related Discussions:- Interest rate parity

INVESTMENT DECISION, You are a ceo of a sotware firm that has limited acces...

You are a ceo of a sotware firm that has limited access to debt equity markets. The average return on last year projects is 28 % . and cost of capital is 12%. would npv pr Irr be

Distinguish between exchange traded instruments, Question: (a) What are...

Question: (a) What are the differences and similarities between futures and forwards? (a) Distinguish between exchange traded instruments and over the counter instruments

Evaluate the annualized forward premium, Question: (a) A bank quotes t...

Question: (a) A bank quotes the following prices for the US dollar: €0.7915 - €0.7918 A German company receives €10 million as payment for a generator supplied to an Americ

Multinational Business Finance, The Vodafone Corporation arranged a one-yea...

The Vodafone Corporation arranged a one-year, $1.5 million loan to fund a foreign project. The loan was denominated in Euros and carried a 10% nominal rate. The exchange rate at

Explain ethical decision-making, Problem 1: (a) Will a corporation be m...

Problem 1: (a) Will a corporation be morally responsible for its actions? (b) Why do corporations engage in social responsibilities, and what are the potential drawbacks?

Mmtheory, the departure from Modigliani-Miller proposition using the agency...

the departure from Modigliani-Miller proposition using the agency cost and information asymmetry theory of capital structure

Corporate Finance, Calculate the EAR of the following APR: a. APR at 10.8% ...

Calculate the EAR of the following APR: a. APR at 10.8% compounded monthly. (2 marks) b. APR at 8.4% compounded quarterly. (2 marks) c. APR at 9.0% compounded semi-annually. (2 mar

Annuities, You are considering the purchase of a deferred annuity that will...

You are considering the purchase of a deferred annuity that will pay $10,000 a year at the end of each year for 20 years, to you or a desgnated survivor. (sure thing) Payments wil

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd