HATED IT!
I really did. It was on the money market and given Bernanke's recent announcement of the Fed's intent to purchase $600 billion in tbills and I saw how the book said this is the opposite of what he should be doing.
It sounds to me like the money market is essentially a bunch of check kiting with interest. Some of it is okay, like post dating a check ??! (as an aside, this is called a banker's acceptance and used to import goods)
So, it's illegal for you to do it, to your bank, but not for your bank to do it to their bank. Got it?
But the only other alternative it seems is for the Fed to lower the reserve requirement for banks, which would in effect loosen the funds available to lend, increase interest rates and send the economy in the right direction. but then people might realize that the banks are living paycheck to paycheck deposits like the rest of america and don't have the money to lend to each other overnight anymore...so then we'll just print more money, buy more bills, and indirectly boost the amount of money you need to keep on deposit, but since you will have more on deposit, that shouldn't be so hard to do.
In addition, the idea of repurchase agreements got me angry, too.
Now, about that 1.1% CD...
Anyhow I missed several questions and I do care about that. They were #s 2, 8, 11, 13, 15. money center banks must not be members of the Federal Reserve System. #8 was about commercial paper which said which of these is false, and I read which is true and saw that the first one was true and marked it. commercial paper matures 270 days or fewer, is cheaper than borrowing from a bank, usually sell at a discount and are redeemed at par value and usually is only issued by companies with good credit ratings because they are unsecured.
Fed targets the Fed funds rate w/its open market ops. This is not the discount rate (what the Fed loans $ to banks at for overnight loans) but it is the rate that banks loan to each other at (of course, after receiving the loan from the fed to loan to the other bank). AARGH.
banks that need a payday loan (I'm jesting) can borrow in the Eurodollar market LIBOR London InterBank something OR other.
Money Market funds must register w/the SEC because of Cam Newton. OH, wrong SEC.
10/15 . 66 % . FAIL >8(
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