Central Banks and Financial Markets

Default Risk Key Terms for Review Key Problems for Review Session 10: Stock Markets 10.1 Learning Objectives 10.2 Understanding the Nature of a Stock 10.3 Calculating the Value of a Stock 10.4 Alternative Measures 10.5 Stock Market Indices 10.6 The Equity Risk Premium 10.7 Fundamental and Technical Analysis of Stocks 10.8 The Graham Approach 10.9 The Dogs of the Dow Approach 10.10 The Bogle Approach 10.11 The Gebert Approach 10.12 Using Financial Leverage Key Terms for Review Key Problems for Review Session 11: Foreign Exchange Markets 11.1 Learning Objectives 11.2 Understanding the Nature of an Exchange Rate 11.3 Explaining Exchange Rates in the Long Run 11.4 Explaining Exchange Rates in the Medium Run 11.5 Exchange Rate Regimes 11.6 A Supply and Demand Framework 11.7 Exchange Market Interventions 11.8 ERM II and the Impossible Trinity Key Terms for Review Key Problems for Review Session 12: Derivative Markets 12.1 Learning Objectives 12.2 Understanding the Nature of a Derivative Instrument 12.3 Types of Derivatives Key Terms for Review Key Problems for Review Part IV Session 13: The Cost of Capital 13.1 Learning Objectives 13.2 Estimating the Cost of Capital 13.3 Estimating the Cost of Debt 13.4 Estimating the Cost of Preferred Equity 13.5 Estimating the Cost of Common Equity 13.6 Estimating the Weighted Cost of Capital 13.7 A Few Practical Problems Key Terms for Review Key Problems for Review Session 14: Dividend and Dividend Policy 14.1 Learning Objectives 14.2 A Look at the Concept of Dividends 14.3 A Look at Dividend Policy 14.4 Dividend Yield and Dividend Cover 14.5 Dividend Payout and Retention Ratio 14.6 Theories of Investor Preference Key Terms for Review Key Problems for Review Session 15: Mergers and Acquistions 15.1 Learning Objectives 15.2 A First Look at Mergers and Acquisitions 15.3 Types of Mergers and Acquisitions 15.4 Motives Underlying Mergers and Acquisitions 15.5 A Look at the Empirical Evidence Key Terms for Review Key Problems for Review Part V Session 16: Market Efficiency and Market Anomalies 16.1 Learning Objectives 16.2 Forms of Efficiency 16.3 Market Anomalies 16.4 Behavioural Finance 16.5 Understanding Asset Price Bubbles 16.6 Macroeconomic Effects of Asset Price Bubbles Key Terms for Review Key Problems for Review Session 17: Information Problems in Financial Markets 17.1 Learning Objectives 17.2 Moral Hazard and Adverse Selection 17.3 Implications for Financial Markets 17.4 Mechanisms Alleviating Information Problems Key Terms for Review Key Problems for Review Session 18: Commercial Banks 18.1 Learning Objectives 18.2 Commercial Banks 18.3 On the Macoreconomic Importance of the Banking Sector 18.4 Bank Runs and Banking Crises 18.5 Longer Term Trends in the Euro Area Banking Sector Key Terms for Review Key Problems for Review Session 19: Other Financial Intermediaries 19.1 Learning Objectives 19.2 Pension Funds 19.3 Insurance Corporations 19.4 Mutual Funds 19.5 Sovereign Wealth Funds 19.6 Hedge Funds 19.7 Some Concerns about the Shadow Banking System Key Terms for Review Key Problems for Review Session 20: Central Banks 20.1 Learning Objectives 20.2 European Economic and Monetary Union 20.3 Convergence Criteria 20.4 The Structure of the Eurosystem 20.5 The Structure of the U.S. Federal Reserve System Key Terms for Review Key Problems for Review Session 21: Monetary Policy 21.1 Learning Objectives 21.2 The Costs of Inflation 21.3 Time Lags in Monetary Policy 21.4 The Conduct of Monetary Policy 21.5 The Quantity Theory of Money 21.6 The P-Star Approach 21.7 On the Importance of Money for Central Banks 21.8 Defining Money 21.9 Monetary Definitions in the Euro Area 21.10 Alternative Monetary Policy Strategies 21.11 The Monetary Policy Strategy of the ECB 21.12 The Balance Sheet and the Process of Money Creation 21.13 The Money Multiplier 21.14 Linking Money and Credit 21.15 Taylor Rules 21.16 The Monetary Policy Transmission Process 21.17 Monetary Policy Instruments 21.18 Unconventional Monetary Policy Key Terms for Review Key Problems for Review Part VI Session 22: Financial Crises and Financial Regulation 22.1 Learning Objectives 22.2 Defining Financial Crises 22.3 Financial Stability and Financial Instability 22.4 Early Warning Models 22.5 The Banking Union in the European Union Key Terms for Review Key Problems for Review Part VII Session 23: List of Symbols and Abbreviations Session 24: Multiple Choice Test Session 25: Glossary Session 26: References Session 27: Keywords