Exam (elaborations)
Exam 1 FINC 4410 Hart Questions & answers
- Course
- Institution
Exam 1 FINC 4410 Hart Questions & answers
[Show more]
Seller
Follow
EXAMQA
Reviews received
Content preview
Exam 1 FINC 4410 HartBond market market value >
Market Cap of Stocks
National Debt is accumulation of all the deficits.
2 categories: Intragovernmental holdings (social securities and gov
investing in treasuries) and Held By Public (T-bills, notes, bonds, TIPS,
FRN)
Treasury Department
Cash management of the federal government
-Bring in taxes (IRS)
-Issue treasury securities (T-bills, notes, bonds, Treasury
Inflation-Protected Securities, Floating Rate Notes)
Janet Yellen
Current U.S. Secretary of Treasury
Debt is Related to Income
For a country: Debt divided by GDP
-U.S. is 3rd worst ratio (129%)
-Japan has worst ratio; most of their debt is within the country
U.S. dollar is the reserve currency of the world
May not always be reserve currency.
-Is a bad idea to default on the debt.
- Foreign central banks hold more U.S. dollars than any other country
, Lots of other countries own U.S. treasury securities
Of foreign entities, Japan holds the most treasury securities (1.1 trillion),
followed by China, then the UK
Owns the most amount of the U.S. debt
U.S. Citizens
Having a strong currency means you can buy more things
Helps curb inflation
-sidenote: country w/ strongest Navy has always had the reserve currency
Monetizing the debt. (Printing more money and paying national debt off)
-Inflation would be huge
-Too much money chasing too few goods and services.
-Paying more for the same good/service.
-Governments make makeshift jobs all the time. (Jobs that don't create
value)
- Wages never keep up w/ inflation; inflation means lower standard of living
Real GDP + Inflation = Nominal GDP
-Real GDP 2 to 3% (more goods/services each year) (negative means
recession)
-inflation 2 to 3.5%
-nominal GDP 4 to 6.5%
(Historically speaking)*****
Fiscal Government Policy
*Tax and Spend*
-Congress and president
-2 branches determine this (executive and legislative)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller EXAMQA. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now