FINANCIAL MARKETS AND MONETARY POLICY Essay Example | Topics and Well Written Essays - 2000 words

FINANCIAL MARKETS AND MONETARY POLICY - Essay Example Other research has offered a concrete evidence favoring instability in the yield curve of the United States. The evidence is referenced with a rising theory on the side of macroeconomic where the inflation dynamic and real activity was characterized by significant period variation in various industrialized economies. The function of this paper double folds. First, the paper assesses the extent of period variation in the changes of some yield curve and macroeconomic variables. Secondly, the paper investigates if the term structure analysis can shed new dimensions of the performance of UK macroeconomic of the last five years. It is emphasized that various present studies have analyzed the UK macro economy dynamics and its term structure in situ. There is also a systematic investigation on the evolution of the connection between the yield curve and the economy over time. The paper specifies the relationship between finance and macro like in Nelson-Siegel model UK yield curve from 2008-2 012 Financial Instrument for the Yield Curves Gilt-edged securities Normal gilt is a sure way by the nation to make payments of the guilt. A fixed cash payment is made semi-annually until a maturity date is attained. At maturity, the holder receives the terminal coupon and the principal. The index-linked gilt is generated to protect the investment value (Mishkin, 2012). General Collateral sale and repurchase agreement The transactions of selling and repurchasing involve the temporal exchange of gilt and cash between partners; gilts are used as collaterals. The fund ‘slender will hold gilt as collateral, so is safeguarded when the borrower defaults. The repo of the General Collateral is the rated for repurchasing agreement where gilt may be utilized as collateral. Therefore, the General collateral was closer to the risk-free rates. The contracts of Repo are traded actively for maturities annually. The rates prevailing on the Repo contracts are equal to the yields of the convent ional gilts maturity (Ritter , Silber, Udell ", 2009). Interbank loans An interbank loan is a loan where the lender receives a certain agreed sum at call. The loan was not tradable. The offer rate was the interest rate the bank was willing to lend cash to financial institutions. The offer rate was calculated by mean of the medium offer rates that was collected at 11 am from 16 financial institutions. Short sterling future A short sterling contract was the future contract of sterling interest rate that settled on the LIBOR rate that prevailed on the delivery date of the contract. The contracts were traded and standardized between the Options Exchange and London International Financial Future members. Forward rate agreement This is the Over the Counter contract where the counter parties decide to exchange the difference in the LIBOR rate and agreed interest rate. We calculated the payment against the principal. The instrument allowed organizations to be held in future lending rate s and interbank borrowing. Unlike the future contracts, the instrument was a bilateral agreement having no secondary market (Madura ", 2008). Swaps This is where the two counterparts decide to exchange the payments of interest rates for payments of floating interest rates, based on the notional principal at the beginning of successive periods. The instrument was equal to a

Review Essay Example | Topics and Well Written Essays - 1000 words - 2

Review - Essay Example The informal networks within the organization are rarely depicted (if they are known at all!) The background concepts you have seen before. Remember Appendix A? I am still amazed at how the work ÃŽ ¿f Randolph and Dess has persisted. We still use much ÃŽ ¿f the terminology they coined. Some distinction is made about the differences between line and staff personnel. The concept ÃŽ ¿f line vs. staff authority is not really addressed. Line authority is clear positional authority to make decisions relating to the work ÃŽ ¿f the firm. Classically this means the manager on the line producing the product. Line authority is real, legitimate authority--within the legitimate realm ÃŽ ¿f the manager. Staff authority is advisory--staff experts make recommendations that line managers may use or not. The information perspective--asks managers to assess the uncertainty in the external environment. Two possible strategies: design structures in the organization that increase information gathering about the environment. Or, design flexibility into the organization. Environmental uncertainty is affected by the complexity ÃŽ ¿f the external environment and whether that environment is stable or rapidly changing. Higher complexity and rapid change creates the most uncertainty. This harkens back to the idea that mechanistic organizations tend to be possible in very stable environments and organic organizations tend to be successful in complex, unstable ones--like the microcomputer industry. Randolph, W. Alan; Gregory G. Dess. The Congruence Perspective ÃŽ ¿f Organization Design: A Conceptual Model and Multivariate Research Approach. Academy ÃŽ ¿f Management. The Academy ÃŽ ¿f Management Review (pre-1986); Jan 1984 Management has a specific economic & social objective hence is can be applied everywhere. It is a continuous, multidisciplinary, dynamic process. "Management is a multipurpose organ that manages a business manages a manager and manages workers and work" as defined by Peter Druker.