MONEY BANKNG FINANCE

Econ 301 Money and Banking RP1

Inflation 1. Research the difference between CPI and GDP deflator to calculate inflation using this Article.

Answer True False questions in excel and questionnaire

2. Using the data provided in excel template calculate

a. US inflation rate from 2000 to 2016

b. Japan inflation rate from 2000 to 2016

c. Answer the questions in the excel and questionnaire

Bonds 1. Using Figure and link provided in the excel, analyze and answer the questions in the excel and

questionnaire regarding Corporate Aaa, Corporate Baa bonds and 3-month Treasury Bills.

2. Research the difference between the fed funds rate and 3 month T bills and answer

questionnaire.

Risk Return SP500, FTSE100, RDSA.L, XOM  Give a summary about each asset,

 what exchange are they listed on

 what is the sector

 does it pay a dividend if so how much?

 Using yahoo finance, download and import the first day of the month close prices for SP500, FTSE100, RDSA.L and XOM into the excel template for the dates given

 SP500

 RDSA.L

 XOM

 FTSE 100

 Calculate the

 % returns matrix

 Expected returns

 Variances

 Standard deviations ( volatility)

 Covariances

*Note: When calculating above statistics, make sure your M (# of variables) is consistent with # of returns i.e. if you have 10 close prices you will have 9 returns **You can use the excel functions to calculate your statistics

 Using your data analysis answer the questions on the questionnaire.

Extra Listen to the following podcast and answer the questionnaire

Fed Sets Out To Shrink Balance Sheet by Half