6.

Briefly compare the risk involved in these markets: Stocks, Government Bonds,

Corp Bonds, Derivatives, Foreign currency, FDI.

7.

Discuss the problem of asymmetrical information (adverse selection and moral

hazard) in our financial intermediary system. Include

a.

Banking and FDIC

b.

The FED as a lender of last resort

c.

What is the role of regulations in minimizing these asymmetries?

8.

Evaluate these Federal Reserve goal criteria in terms of observability,

controllability, measurability. Does the FED have a direct impact on: inflation,

FFR, prime Interest rate, unemployment, money supply, GDP growth, stability,

velocity, dollar exchange rate. Do we have data on some of them? Can we suggest

some other measures to add to the list of goals ?

9.

What is the impact of reserve requirement and interest on excess reserve on the

process of money creation (especially expanding credit and money supply)?