1.(TCO 1) Explain financial intermediation and summarize the benefits of financial intermediation.(Points : 15)

Question 2.2.(TCO 2) Analyze why the Federal Reserve is less "independent" than what it appears to be.(Points : 15)

Question 3.3.(TCO 4) Analyze why realized real rates of interest are sometimes negative, but expected real rates are always positive. Provide an example.(Points : 15)

Question 4.4.(TCO 5) Explain and examine interest rate risk. Identify the two risk components of interest rate risk and explain how these interact with each other.(Points : 15)

Question 5.5.(TCO 5) Summarize the term structure of interest rates and analyze how this can be used to help forecast future interest rates.(Points : 15)

Question 6.6.(TCO 6) Determine and explain the economic functions of money markets.(Points : 15)

Question 7.7.(TCO 7) Determine what has contributed to the increased globalization of bond markets.(Points : 15)

Question 8.

8.(TCO 8) Determine and explain why mortgage-backed securities guaranteed by Federal government agencies often have yields above U.S. Treasury bond rates.(Points : 15)