Chapter 1: Role of Financial Markets and Institutions Describe the types of financial markets that facilitate the flow of funds. Describe the types of securities traded within financial markets. Describe the role of financial institutions within financial markets. Explain how financial institutions were exposed to the credit crisis Chapter 2: Determination of Interest Rates Apply the loanable funds theory to explain why interest rates change. Identify the most relevant factors that affect interest rate movements. Explain how to forecast interest rates Chapter 3: Structure of Interest Rates Describe how characteristics of debt securities cause their yields to vary. Demonstrate how to estimate the appropriate yield for any particular debt security. Explain the theories behind the term structure of interest rates (relationship between the term to maturity and the yield of securities). Chapter 4: Functions of the Fed Describe the organizational structure of the Fed. Describe how the Fed influences monetary policy. Explain how the Fed revised its lending role in response to the credit crisis. Explain how monetary policy is used in other countries. hapter 5: Monetary Policy Describe the mechanics of monetary policy. Explain the trade-offs involved in monetary policy. Describe how financial market participants respond to the Fed's policies. Explain how monetary policy is affected by the global environment. Chapter 1: Role of Financial Markets and Institutions Describe the types of financial markets that facilitate the flow of funds. Describe the types of securities traded within financial markets. Describe the role of financial institutions within financial markets. Explain how financial institutions were exposed to the credit crisis Chapter 2: Determination of Interest Rates Apply the loanable funds theory to explain why interest rates change. Identify the most relevant factors that affect interest rate movements. Explain how to forecast interest rates Chapter 3: Structure of Interest Rates Describe how characteristics of debt securities cause their yields to vary. Demonstrate how to estimate the appropriate yield for any particular debt security. Explain the theories behind the term structure of interest rates (relationship between the term to maturity and the yield of securities). Chapter 4: Functions of the Fed Describe the organizational structure of the Fed. Describe how the Fed influences monetary policy. Explain how the Fed revised its lending role in response to the credit crisis. Explain how monetary policy is used in other countries. hapter 5: Monetary Policy Describe the mechanics of monetary policy. Explain the trade-offs involved in monetary policy. Describe how financial market participants respond to the Fed's policies. Explain how monetary policy is affected by the global environment