Assignment:
Choose a current news article (no overlapping please) that relates to the topics covered in this module. [Note: please select an article that's current, no less than one year old.]
Read the discussion board to ensure the article is not being used by another student.
Post the article name and source to the discussion board.
Summarize the problem cited in the article and propose a solution if available.
Be sure to relate the problem and solution to the textbook and other readings for the week. Articles/topics not related to the weekly learning topics will not receive full credit.
In your replies, include an alternative solution and state your rationale.
Quantity:
Each student must make a minimum (for a chance at the best score - post early and often) of two posts for each discussion - one initial post and one reply to posts made by your peers.
The initial post must be approximately 200 to 250 words in length
The reply post must be approximately 50 to 75 words in length
Quality:
All posts must be substantive, relevant, and respectful, and contribute value to the discussion. "I agree" types of posts are fine to make, but they do not count towards the minimum posting requirement.
Part 1: Initial post(200 to 250 words and you can use other's post as an example)
Topic: Financial Instruments, Financial Markets, and Financial Institutions.
Part 2: Reply to posts (50 to 75 words)
Other's post:
JP Morgan has created an index to track the effect of Trump's tweets on financial markets: ‘Volfefe index'
JP Morgan has discovered that the bond market is being affected by Donald Trump's tweets. While trying to measure the effect of Trump's tweets on the bond market, J.P. Morgan formulated a "Volfefe Index" to examine how the president's tweets are impacting the volatility of the interest rates in U.S. Similarly, President Trump's market-moving messages usually seen to include key words such as "China," "billion" and "products" while referring to trade and monetary policy. These tweets are progressively less inclined to get good reactions, for example, likes or retweets, from the president's followers.
President Trump's tweeting habits have been analyzed in various ways that shows that during the days when Trump tweets more than usual are also integrated with negative stock market returns, according to Bank of America Merrill Lynch. Since his election in 2016, Trump has averaged an excess of 10 tweets per day to his about 64 million followers. According to JP Morgan's report, the vast majority of Trump's tweets come around early afternoon to 2:00 pm, with a 1:00 pm tweet about multiple times as liable to touch base at some other hour of the evening or night. Trump's 3:00 am tweets are additionally more typical than 3:00 pm tweets, which can be a problem for U.S. rates markets.
However, the Dow is up 42% since the 2016 presidential election and 31% since Trump's inauguration. President Trump has turned out to be overall useful for the stock market even while his twitter action can interrupt markets with abrupt assaults on China exchange or the Federal Reserve.
Write your reply:
Part 3 Answer questions:
For essay questions, briefly answer each with a paragraph or two.
Each paragraph should contain a minimum of three sentences.
Yes and no answers are not acceptable.
1. If higher leverage is associated with greater risk, explain why the process of deleveraging (reducing leverage) can be destabilizing.
2. You wish to buy an annuity that makes monthly payments for as long as you live. Describe what happens to the purchase price of the annuity if:
(1) your age at the time of purchase goes up,
(2) the size of the monthly payment rises, and
(3) your health improves.
3. How might broader access to finance benefit a country where access was previously very limited?
4. Joe and Mike purchase identical houses for $200,000. Joe makes a down payment of $40,000 while Mike only puts down $10,000; for each individual, the down payment is the total of his net worth. Assuming everything else equal, who is more highly leveraged? If house prices in the neighborhood immediately fall by 10 percent (before any mortgage payments are made), what would happen to Joe's and Mike's net worth?
5. What risks might financial institutions face by funding long-run loans such as mortgages to borrowers (often at fixed interest rates) with short-term deposits from savers?