+1-415-670-9189
info@expertsmind.com
Explain how prices of u.s. money market securities
Course:- Finance Basics
Reference No.:- EM13298349




Assignment Help
Assignment Help >> Finance Basics

As a personal financial planner, one of your tasks is to prescribe the allocation of available funds across money market securities, bonds, and mortgages. Your philosophy is to take positions in securities that will benefit most from your forecasted changes in economic conditions. As a result of recent event in Japan, you expect that in the next month Japanese investors will reduce their investment in U.S. Treasury securities and shift most of their funds into Japanese securities. You expect that this shift in funds will persist for at least a few years. You believe this single event will have a major effect on economic factors in the U.S. such as interest rates, exchange rates, and economic growth in the next month. Because the prices of securities in the U.S. are affected by these economic factors, you must determine how to revise your prescribed allocations of funds across securities.

Assume that day-to-day exchange rate movements are dictated primarily by the flow of funds between countries, especially international bond and money market transactions. How will exchange rates be affected by possible changes in the international flow of funds that are caused by the event?

Explain how prices of U.S. money market securities, bonds, and mortgages will be affected.

Assess the impact on security prices. Would prices of risky securities be affected more or less than those of risk-free securities with a similar maturity? Why?

 




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Finance Basics) Materials
Use 2 transactions in recent financial news to illustrate and explain the roles of financial intermediaries, and banks in particular, in these transactions.Furthermore, expl
Describe GASB requirements for accounting for Investment Trust Funds, What are the required financial statements for a pension trust fund? What are the required supplementary
Your company, Dawgs "R" Us, is evaluating a new project involving the purchase of a new oven to bake your hot dog buns. If purchased, the new oven will replace your existing o
Your grandmother put $35,000 aside for you 13 years ago. Today, the account is worth $76,432.16. Assuming the money was invested with a daily compounding, what was the rate
You already have a well-diversified portfolio of domestic assets.  You are considering reallocating some of the money in your domestic portfolio to a global equity fund that i
If a company's dividends are expected to decline, is it possible to still use the constant growth dividend discount model? What is the relation between the expected return o
What is the arithmetic average excess return and standard deviation of the returns for each stock? Remember, you should use excess returns to calculate standard deviation. T
Assuming a change in interest rates over time, explain the two risks faced by the holder of a bond - The ability to immunize a bond portfolio is very desirable for bond portfo