Finance assignment
Recent events in the political landscape are having a real world market impact on the financial markets, interest rates the Federal Reserve and other Central Banks. These events provide a great opportunity to see a number of the theories and concepts we have studied this term play out in front of us. To take advantage of this, I am providing an extra credit opportunity worth up to 15 points.
Three articles are attached and the assignment for the respective articles are described under each article. The assignment will be due on November 22, 2016 for class discussion on that date. The assignment for each article is worth 5 points (15 total). I would expect that your responses for each article could be covered in approximately a half-page per article. This is not a group assignment. Each student is expected to turn in their own independent work.
1. Central Banks Facing Challenges From Political Events WSJ-
a) Cite and describe two examples from the article of political leaders making comments that could be seen as attempting to bring political pressure to bear on their respective country's central bank.
b) Answer the question: What is a primary concern cited in the article of investors regarding monetary policy becoming politicized?
2. What Trump's Win Means for the Fed WSJ
List and describe 3 possible outcomes cited in the article that could result from the recent election of Donald Trump as President of the United States.
3. Benchmark 10-Year Treasury Yield Crosses 2% for First Time in 8 Months WSJ
a) Comment on the expected movement in interest rates cited in the article and explain using the loanable funds theory.
b) Apply the Pure Expectations theory to explain the 'steepening' of the yield curve noted in the article.
Use supply and demand graphs to support your answers.