Financial Markets and Institutions

Preface
Supplements
Introduction and Overview of Financial Markets
	Introduction
	Determinants of Interest Rates
	Interest Rates and Security Valuation
	Appendix 3A: Duration and Immunization
	Appendix 3B: More on Convexity
	The Federal Reserve System, Monetary Policy, and Interest Rates
Securities Markets
	Money Markets
	Appendix 5A: Single versus Discriminating Price Treasury Auctions
	Appendix 5B: Creation of a Banker’s Acceptance
	Bond Markets
	Mortgage Markets
	Appendix 7A: Amortization Schedules for No-Points versus Points Mortgages in Example 7–4
	Stock Markets
	Appendix 8A: The Capital Asset Pricing Model
	Appendix 8B: Event Study Tests
	Foreign Exchange Markets
	Appendix 9A: Balance of Payment Accounts
	Derivative Securities Markets
	Appendix 10A: Black–Scholes Option Pricing Model
Commercial Banks
	Commercial Banks: Industry Overview
	Commercial Banks’ Financial Statements and Analysis
	Regulation of Commercial Banks
	Appendix 13A: Calculating Deposit Insurance Premium Assessments
	Appendix 13B: Calculating Risk-Based Capital Ratios
	Appendix 13C: Primary Regulators of Depository Institutions
	Appendix 13D: Deposit Insurance Coverage for Commercial Banks in Various Countries
	Appendix 13E: Calculating Minimum Required Reserves at U.S. Depository Institutions
Other Financial Institutions
	Other Lending Institutions: Savings Institutions, Credit Unions, and Finance Companies
	Insurance Companies
	Securities Firms and Investment Banks
	Mutual Funds and Hedge Funds
	Pension Funds
	Appendix 18A: Calculation of Growth in IRA Value during an Individual’s Working Years
Risk Management in Financial Institutions
	Types of Risks Incurred by Financial Institutions
	Managing Credit Risk on the Balance Sheet
	Managing Liquidity Risk on the Balance Sheet
	Appendix 21A: New Liquidity Risk Measures Implemented by the Bank for International Settlements
	Appendix 21B: Sources and Uses of Funds Statement: Bank of America, June 2010
	Managing Interest Rate Risk and Insolvency Risk on the Balance Sheet
	Managing Risk off the Balance Sheet with Derivative Securities
	Appendix 23A: Hedging with Futures Contracts
	Appendix 23B: Hedging with Options
	Appendix 23C: Hedging with Caps, Floors, and Collars
	Managing Risk off the Balance Sheet with Loan Sales and Securitization
References
Index
End Papers