FIL 241 Study Guide - Midterm Guide: Comparative Advantage, Bear Stearns, Floating Exchange Rate
2 May 2017
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What are their characteristics: fixed monthly payment, mortgage is a lien on the property used as a collateral for the loan, when mortgage is fully paid, the lien is removed and the borrower obtains. How do they affect the markets: american: you can buy at anytime up until the expiration day, european: exercised only on the expiration date. How are they used: swap contract: an agreement to exchange future cash flows of different patterns, one pays adjusted interest rate and swaps with someone who pays fixed interest rates. Why is it important: prices of the same goods in two countries should be the same when expressed in the same currency. If a country has high inflation, its currency value goes down. In august 1000 greeks in the private sector were losing their jobs daily. It is important because it effects the global economy. The u. s. isn"t in the eu so it shouldn"t effect our stock market directly.
