Money and Banking

  1. Financial Markets and Interest Rates
    1. Overview of Financial Markets
      1. Functions of Financial Markets
        1. Channeling Funds from Savers to Borrowers
          1. Price Discovery
            1. Risk Sharing and Diversification
              1. Liquidity Provision
                1. Information Processing
                2. Classification of Financial Markets
                  1. Debt Markets
                    1. Government Bonds
                      1. Corporate Bonds
                        1. Municipal Bonds
                          1. Money Market Instruments
                          2. Equity Markets
                            1. Common Stock
                              1. Preferred Stock
                                1. Stock Exchanges
                                2. Primary Markets
                                  1. Initial Public Offerings
                                    1. New Issue Process
                                      1. Underwriting
                                      2. Secondary Markets
                                        1. Trading of Existing Securities
                                          1. Market Makers
                                            1. Liquidity Provision
                                            2. Organized Exchanges
                                              1. Centralized Trading
                                                1. Listing Requirements
                                                  1. Regulatory Oversight
                                                  2. Over-the-Counter Markets
                                                    1. Dealer Networks
                                                      1. Negotiated Transactions
                                                        1. Electronic Trading Systems
                                                        2. Money Markets
                                                          1. Short-term Instruments
                                                            1. Treasury Bills
                                                              1. Commercial Paper
                                                                1. Certificates of Deposit
                                                                  1. Federal Funds
                                                                    1. Repurchase Agreements
                                                                    2. Capital Markets
                                                                      1. Long-term Instruments
                                                                        1. Corporate Bonds
                                                                          1. Government Securities
                                                                            1. Mortgage Markets
                                                                        2. Understanding Interest Rates
                                                                          1. The Time Value of Money
                                                                            1. Present Value Concept
                                                                              1. Future Value Calculations
                                                                                1. Discounting Cash Flows
                                                                                  1. Compounding
                                                                                  2. Yield Calculations
                                                                                    1. Current Yield
                                                                                      1. Yield to Maturity
                                                                                        1. Yield to Call
                                                                                          1. Holding Period Return
                                                                                          2. Relationship Between Price and Yield
                                                                                            1. Inverse Relationship
                                                                                              1. Duration and Price Sensitivity
                                                                                                1. Convexity
                                                                                                2. Real vs. Nominal Interest Rates
                                                                                                  1. Inflation Effects
                                                                                                    1. Fisher Equation
                                                                                                      1. Real Rate Determination
                                                                                                      2. Interest Rates vs. Returns
                                                                                                        1. Expected vs. Actual Returns
                                                                                                          1. Risk-Adjusted Returns
                                                                                                            1. Total Return Components
                                                                                                          2. The Behavior of Interest Rates
                                                                                                            1. Theory of Asset Demand
                                                                                                              1. Determinants of Asset Demand
                                                                                                                1. Wealth
                                                                                                                  1. Expected Return
                                                                                                                    1. Risk
                                                                                                                      1. Liquidity
                                                                                                                      2. Portfolio Theory Applications
                                                                                                                      3. Supply and Demand in Bond Markets
                                                                                                                        1. Bond Demand Factors
                                                                                                                          1. Wealth Changes
                                                                                                                            1. Expected Returns
                                                                                                                              1. Risk Perceptions
                                                                                                                                1. Liquidity Preferences
                                                                                                                                2. Bond Supply Factors
                                                                                                                                  1. Government Financing Needs
                                                                                                                                    1. Corporate Investment
                                                                                                                                      1. Expected Profitability
                                                                                                                                      2. Market Equilibrium
                                                                                                                                        1. Shifts in Supply and Demand
                                                                                                                                        2. Liquidity Preference Framework
                                                                                                                                          1. Money Demand
                                                                                                                                            1. Transactions Demand
                                                                                                                                              1. Precautionary Demand
                                                                                                                                                1. Speculative Demand
                                                                                                                                                2. Money Supply
                                                                                                                                                  1. Equilibrium Interest Rate
                                                                                                                                                    1. Changes in Money Supply and Demand
                                                                                                                                                  2. Risk and Term Structure of Interest Rates
                                                                                                                                                    1. Risk Structure of Interest Rates
                                                                                                                                                      1. Default Risk
                                                                                                                                                        1. Credit Ratings
                                                                                                                                                          1. Rating Agencies
                                                                                                                                                            1. Risk Premiums
                                                                                                                                                              1. Credit Spreads
                                                                                                                                                              2. Liquidity Risk
                                                                                                                                                                1. Marketability
                                                                                                                                                                  1. Bid-Ask Spreads
                                                                                                                                                                    1. Trading Volume
                                                                                                                                                                    2. Tax Considerations
                                                                                                                                                                      1. Tax-Exempt Securities
                                                                                                                                                                        1. After-Tax Yields
                                                                                                                                                                          1. Municipal Bonds
                                                                                                                                                                        2. Term Structure of Interest Rates
                                                                                                                                                                          1. Yield Curves
                                                                                                                                                                            1. Normal Yield Curve
                                                                                                                                                                              1. Inverted Yield Curve
                                                                                                                                                                                1. Flat Yield Curve
                                                                                                                                                                                  1. Humped Yield Curve
                                                                                                                                                                                  2. Theories of Term Structure
                                                                                                                                                                                    1. Expectations Theory
                                                                                                                                                                                      1. Pure Expectations Hypothesis
                                                                                                                                                                                        1. Forward Rates
                                                                                                                                                                                          1. Limitations
                                                                                                                                                                                          2. Market Segmentation Theory
                                                                                                                                                                                            1. Preferred Habitat
                                                                                                                                                                                              1. Institutional Factors
                                                                                                                                                                                              2. Liquidity Premium Theory
                                                                                                                                                                                                1. Term Premiums
                                                                                                                                                                                                  1. Risk Compensation
                                                                                                                                                                                                    1. Empirical Evidence

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                                                                                                                                                                                            1. Introduction to Money

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                                                                                                                                                                                            3. Financial Institutions and Banking