BU111 Lecture Notes - Lecture 20: Nominal Yield, Computer-Aided Design, Preferred Stock
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BU111 Full Course Notes
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Low rates led to increase debt load of citizens and housing price boom some want higher rate. Changes in banking: deregulation; changes in consumer demands; competition from foreign banks. Manages economy and regulates aspects of chartered banks operations. Chartered banks borrow from boc at bank rate/rediscount rate. Ea(cid:272)h (cid:374)atio(cid:374) tries to i(cid:374)flue(cid:374)(cid:272)e its (cid:272)urre(cid:374)(cid:272)(cid:455) e(cid:454)(cid:272)ha(cid:374)ge rates to ad(cid:448)a(cid:374)tage i(cid:374) i(cid:374)t(cid:859)l trade. World ba(cid:374)k: pro(cid:448)ides li(cid:373)ited ser(cid:448)i(cid:272)es; fu(cid:374)d (cid:374)at(cid:859)l i(cid:373)pro(cid:448)e(cid:373)e(cid:374)ts through loa(cid:374)s incr. productivity. Imf: 188 countries combined resources - stability of exchange rates; short-term loans; cooperation etc. Fixed rate of return, coupon rate; fixed term (principal repaid at maturity) Types: debentures - secured (collateral, less risk) vs unsecured (no collateral, risky, registered (only person who bought it can cash it in) vs bearer bond. Features: callable can pay you back anytime; risky for lender; higher coupon rate, serial bond paid back in instalments, convertible convert bonds to stocks; less risky for investors.
