1. State the determinants of the demand for and the supply of bonds

and explain the equilibrium determination of bond prices.

2. Why do interest rates differ?

3. Name and explain the theories of term structure of interest rates. What is risk(default) premium?

4. What are the off-balance-sheet activities of commercial banks? Name and explain the four primary problems of bank management.

5. Name and explain how a bank can solve its liquidity problem. Define a minimum variance opportunity set, an efficient set,

the capital market line & indifference curves, and use the above concepts to explain how risk is priced. 6. Name and explain the measures of interest rate risk.

7. Name and explain the strategies of interest rate risk management.

8. Name & explain the 2 methods for the FDIC to handle failed banks.