...depositories with credit cards with variable interest rates. What I found was many banks with many credits all with annual percentage rates (APR). So to keep my insanity I just looked at three commercial banks. I looked at Bank of America, US Bank, and Regions bank. I looked at all their credit cards student, business, rewards, and secured. Bank of America credit cards Apr varied anywhere from 12.99% to 20.99%. Here is how they get people, 0% introductory APR for the first 12 billing cycles only for purchases. When that cycle ends your rate will depend on your creditworthiness. US Bank does similar and their rates are from 11.99% to 23.99%. Regions is in the same neighborhood starting at 13.99%, 16.99%, or 19.99% based on credit, but can quickly climb to 24.99% or even 29.99%. Every bank I researched, including credit unions, all based the rate that you would receive on your creditworthiness when you open your account. After that, your APR will vary with the market based on the Prime Rate as set out in the Variable-Rate information section of your agreement. The current annual percentage rate (APR) for a new car can vary from bank to bank, amount to amount, and year to year. It is not something that is set in stone. I looked at PNC bank, US Bank, and St. Louis Community Credit Union for this part of the research. At PNC Bank the annual percentage rate on a loan amount from $15,000 to $49,999 with the model year of the vehicle of 2010 or later is 2.75% to 3.39%. If you...
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...credible (Colander, 2013). At present, consumer confidence, as measured by The Conference Board, is up 5.5 points in October to 94.5 rebounding from 89.0 in September. Expectations increased even greater to 95.0 from 86.4 in September. Both index increases infer growing confidence and positive expectation in current policy. These data will translate to more spending in the aggregate leading to more employment with the probability of increased productivity to supply the demand for goods and services. Consumer Income The US Department of Commerce Bureau of Economic Analysis (BEA) reports personal income increased 0.2 percent for the month of September 2014, and disposable income rising 0.1 percent during the same period. Of note, personal expenditures dropped 0.2 percent equaling this increase. Tis effectively negates any positive contribution to aggregate demand, and in fact, has potential to create an over-supply of goods and services. Interest Rates The Federal Reserve reports no significant changes in key interest rates during the past three months. The...
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...risk premium can be an individual stock or the overall stock market provides over a risk-free rate. And the size of the premium will be a standard to compensate with a higher premium in the stock market. Thus, a portfolio manager when the equity risk premium increases in the future， the investors will sell out stock market because the stocks are over priced. So the legislators and pension administrators decide how much to set aside to meet future pension obligations, based upon assessments of equity risk premiums. However the history data of ERP (Equity Risk Premium) from Federal Reserve System shows it keeps low and stable state but increases suddenly since 2006. At the same time the Federal Funds Effective Rate goes down and keeps low state. We know that interest rate is a way to control inflation. Inflation is a factor causes too much money chasing too few goods. “Changes in the federal funds rate affect the behavior of consumers and businesses, but the stock market is also affected,” Said by Jim Mueller (2013), PhD Finance in Washington State University. “As the risk-free rate goes up, the total return required for investing in stocks also increases.” In other words, the "risk-free" rate of return goes up, making these investments more desirable. But is the low interest rate push the equity risk premium rate goes up?...
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...understanding of the data can help with improving the economic future of our government and organizations. This reflection will help us locate the resources available for finding economic data. Historical Data Resource The BEA (Bureau of Economic Analysis) yields independent budget analysis and economic issues to support congressional budget processes and conducts impartial objectives on the analysis. This would be a valuable source because it contains a large amount of information in one location. There are several divisions that collaborate to complete an accurate economic forecast which include. These divisions include national, international, regional, industry, and integrate accounts, all of which include national income and product accounts, and the gross domestic product to name a couple (U.S. Bureau of Economic Analysis 2013). Current Data Resource A possible resource for current information can include the Federal Reserve Economic Data (FRED). FRED is an online database that includes economic data from several different srouces. FRED was developed by the research department at the Federal Reserve Bank of St. Louis. The database combines data with other tools to help the user understand, interact, and display data. This can be a valuable resource because it allows the used to gain information but also to be able to create “data stories” (Federal Reserve Bank of St.Louis, n.d.). Conclusion Many resources exist for finding...
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...Concerns of Federal Reserve Raising Interest Rates Sharon Cordero Post University Abstract In the midst of a struggling economy were food and energy prices are rising and long-term US Treasury yields approached their highest levels since the start of the year, concerns about higher inflation, have compelled investors to scale back their buying of long-dated Treasuries and European government bonds. As rates rise, the present values of home prices will fall, creating less “equity” for homeowners. Therefore, consumers will be less willing and less able to buy. The Fed tries to indirectly influence other interest rates (especially the federal funds rate) by buying or selling U.S. Securities on a large scale. They do this by buying bonds in mass quantities. Concerns Over Raising Interest Rates The Federal Reserve is the central bank of the United States, created by an act of Congress in 1913. The Federal Reserve sets and enforces the specific legal reserve requirements. There are several well-known types of lending interest rates that the federal reserve and banks charge to banks and consumers and which affect the interest rates that we have to pay for autos or mortgage loans. The discount rate is the rate that the Federal Reserve Bank charges to banks and other financial institutions to borrow short-term funds directly from the central bank. (Heyne, 352) The discount rate affects the rates these financial institutions...
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...FEDERAL RESERVE • In 1913 the Federal Reserve Act was passed, establishing reserve requirements for those commercial banks that chose to become members. • There are 12 Districts across America • It earns most of its income in the form of interest on its holding on US. Government securities as well as providing services to financial institutions. • The income earned is transferred to the Treasury • It regulates commercial banks and conducts monetary policy, adjusting the money supply to achieve full employment and price stability ( low inflation) • Has five major components o Federal Reserve District Banks o Member Banks o Board of Governors o Federal Open Market Committee o Advisory Committees Federal Reserve District Banks • Federal Reserve District Cities: o 1. Boston, Massachusetts o 2. New York, New York (Most important District City) o 3. Philadelphia. Pennsylvania o 4. Cleveland, Ohio o 5. Richmond, Virginia o 6. Atlanta, Georgia o 7. Chicago, Illinois o 8.St. Louis, Missouri o 9. Minneapolis, Minnesota o 10. Kansas City, Kansas o 11. Dallas, Texas o 12. San Francisco, California • Commercial banks that become members must purchase stock in the FED • Each District has 9 members o 6 are elected by member banks in which 3 are professional bankers and 3 are engaged in business o The remaining 3 are appointed by the Board of Governors o All nine directors appoint their Fed district bank president • District banks facilitate...
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...http://www.activitymode.com/product/fis-260-complete-class/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIS 260 COMPLETE CLASS FIS 260 Week 1 Assignment: The Monetary System FIS 260 Week 1 CheckPoint: The Four Pillars and the Components of Finance FIS 260 Week 2 CheckPoint: Functions of the Banking System FIS 260 Week 2 DQs part 1 of 2 FIS 260 Week 2 DQs part 2 of 2 FIS 260 Week 3 Assignment: The Federal Reserve System FIS 260 Week 3 CheckPoint: The Fed Discount Rate and Federal Funds Rate FIS 260 Week 4 CheckPoint: The U.S. Treasury FIS 260 Week 4 DQs part 1 of 2 FIS 260 Week 4 DQs part 2 of 2 FIS 260 Week 5 CheckPoint: Development of the International Monetary System FIS 260 Week 5 Assignment: International Trade FIS 260 Week 6 CheckPoint: The Interest Rate FIS 260 Week 6 DQs part 1 of 2 FIS 260 Week 6 DQs part 2 of 2 FIS 260 Week 7 Assignment: Risk and Diversification FIS 260 Week 7 CheckPoint: Rates of Return FIS 260 Week 8 CheckPoint: Capital Budgeting FIS 260 Week 8 DQs part 1 of 2 FIS 260 Week 8 DQs part 2 of 2 FIS 260 Week 9 Capstone CheckPoint FIS 260 Week 9 Final Project: The Current Financial Environment Activity mode aims to provide quality study notes and tutorials to the students of FIS 260 COMPLETE CLASS in order to ace their studies. FIS 260 COMPLETE CLASS To purchase this visit here: http://www.activitymode.com/product/fis-260-complete-class/ Contact us at: SUPPORT@ACTIVITYMODE.COM FIS 260 COMPLETE CLASS FIS 260 Week 1 Assignment:...
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...ratings. But by now, we are completely sure of one thing; the housing bubble was one factor that generated this financial crisis. So, who is to be blame for creating the housing bubble? According to John Taylor’s article, “How Government Created the Financial Crisis,” lax policies implemented by the Federal Reserve (Fed) caused the financial crisis. As a response to John Taylor’s opinion, Alan Greenspan’s article, “The Fed Didn’t Cause the Housing Bubble”, defends the Fed’s policies and places the fault on mortgage rates, such as long-term or fixed mortgages, as the real cause that triggered the Housing bubble. Even though John Taylor’s, a professor of Economics at Stanford, and Alan Greenspan’s, a former chairman of the Federal reserve, opinions are strongly supported by facts, I’m truly fed up of hearing excuses and finger pointing about the current financial crisis. The fact is that both the Fed’s policies and the rates on mortgages initiated the housing bubble, and I can’t reject either explanation. However I believe that it is time to start thinking about the future, thus, we should worry about how the Fed’s policies should be managed to stimulate the domestic and international US economy for the future. According to John Taylor, it’s the Government’s fault for maintaining interest rates lower than normal during 2003-2005. Even though he is right, one should remember that the Fed lowered the interest rates as a...
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...Kwajelin This week in week three we touched basis on the banks and money and what they parts the play to us in society. As for me this week was not as confusing as weeks one and two was. I say this probably because I was able to sit down and look at the assignments and think about them ahead of time. Talking about the Fed’s increase rates and the Fed’s decrease rates I wanted to engage in more of my interest because, it can be related to the stimulus plan that the government is discussing now. The stimulus plan is to help the economy in rebuilding the economy by helping with control spending within the government and lowering the taxes. I had a struggle with at first the two Fed net selling and Fed net buying. I had never heard of them before so it more interesting and a struggle to see how I could apply them to my personal life. As for week three it was interesting and ready to blast into week four. Brigett This week we covered some very important and complex topics. We started off by defining the uses of money and the ways that money is created by banks. We looked at the monetary policies; how they work, what they affect, and how they are affected by different actions. We discussed the roles of the Federal Bank, the reserves, and the fed funds rates. The most interesting topic for me was the increasing and decreasing of interest rates and how such as simple act can affect our economy, and ultimately, our decisions as consumers. I cannot honestly say how these topics will...
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...impact on the economy. There were clues that the economy may have actually slightly contracted instead of expanding. “The United States economy reversed course in the final quarter of 2012 and contracted at a 0.1% rate and was the worst performance since the financial crisis in 2009.” (Mataconis, 2013) . Even with the overall contraction, the economy is not on the brink of a recession or an extended slump. Companies are still spending. The economy we have been living in since 2009 is going to be the new normal. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. The current prime rate is 3.25%, federal discount rate is 0.75%, fed funds rate is 0.25%, and the 11th District cost of funds is 1.071%. Changes made with federal funds rate and the discount rate also dictate changes in the Wall Street Journal prime rate, which is the interest to borrowers. (Bankrate.com, 2013) The current fixed interest rate for credit cards is 13.02% and for variable interest rate for credit cards are at 15.14%. “The unemployment rate falls to 7.8% as the economy creates 114,000 jobs.”...
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...Complexities of the U.S. Financial System/Assignment 1 Student's Name Professor's Name FIN 100: Principles of Finance December 2014 The U.S. financial markets definitely play a big role in the economy. Unless people invest in businesses, there is no way that they can get started. This is also how they eventually grow in the future in order to meet county's needs and demands. The amount of stocks bought and sold each day directly impact the economy. Prior to the United State's stock market crash in 1929, there was an economic boom. Many Americans had already invested a tremendous amount of money in France. Once the French economy inflated, so did the economy her in the United States. French economy crashed because Americans took their money out of France and put it in U.S. stocks. If that ordeal was to happen today, where all or most of Americans pull their investments, the same economic decrease would happen. Not only would businesses fail, the U.S. would go into even more debt than they already are. The financial market affects all individuals in many ways that we may not even realize. “Many believe that if you don't invest in the stock market, a stock market crash doesn't affect you. However, any average person loses money and opportunities all based off the stock market”.( How does the Stock Market Affect You?, 2011.). When the stock market begins to fall, employers start cutting back on employee benefits. These benefits can include health insurance...
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...The History of the Checking System “Checking accounts are used every day by millions of people. However, many people today do not realize that while they are taking this financial instrument for granted, it was not always a part of banking.” (Woodards) Just as Chris Woodards stated, I was one of those individuals that were taking the checking system for granted, that was until I started to do this research. As I was reading information about the history of the banking system and the checking accounts and check, I really did not know that there was so much information to the history of checking. I just thought that it was something that everyone did or has done forever, not ever paying attention to it. I knew of it just being a part of everyday life, especially as I was growing up. For buyers, checks are a more convenient, secure, and verifiable payments instrument as long as they have the funds in their account to cover the check so it does not get a stamp of “Non-Sufficient Funds.” Before the break out of the Civil War, banknotes and bills of exchange were used extensively; they remained competitive with the deposit accounts. Once the war broke out, congress passed legislation that was known as the National Banking Act. These were the two acts that established the banking system in the United States as we know, and they were the National Banking Acts of 1863 (originally known as the National Currency Act) and the National Banking Act of 1864, this new act was in...
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...Bureaucracy and you October 23, 2011 POS/110 Mary Ann Koehler Axia College The federal bureaucracy is the United States (U.S.) largest employer. They have millions of employees that literally help run the country we all know as home. Their jobs range from postal services, public broadcasting, and to being in control of student loans. The federal bureaucracy plays such a significant role in our everyday lives that sometimes we do not even realize it. My essay will explain five ways in which the federal bureaucracy regulates my everyday life. I will explain the five agencies that are associated with these regulations and give an in depth explanation of the agencies specific job description and how they affect my life. The federal bureaucracy affects my life more than I knew. I was very surprised to learn that almost every move I make and every think I do on a daily basis is based on the federal regulations. My fiancé is in the process of starting his own business so one of my first errands I or we have to run almost every day is to the bank. The bank that I use is run by the Federal Reserve Board (FRB). When I am home I wait for the mail to come because clients send receipts for invoices they receive and I have to keep track of all of them to ensure our books are straight and that all payments have been made. This goes for our monthly bills we get in the mail as well. The United States Postal Service is in charge...
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...Concerns of Federal Reserve Raising Interest Rates Sharon Cordero Post University Abstract In the midst of a struggling economy were food and energy prices are rising and long-term US Treasury yields approached their highest levels since the start of the year, concerns about higher inflation, have compelled investors to scale back their buying of long-dated Treasuries and European government bonds. As rates rise, the present values of home prices will fall, creating less “equity” for homeowners. Therefore, consumers will be less willing and less able to buy. The Fed tries to indirectly influence other interest rates (especially the federal funds rate) by buying or selling U.S. Securities on a large scale. They do this by buying bonds in mass quantities. Concerns Over Raising Interest Rates The Federal Reserve is the central bank of the United States, created by an act of Congress in 1913. The Federal Reserve sets and enforces the specific legal reserve requirements. There are several well-known types of lending interest rates that the federal reserve and banks charge to banks and consumers and which affect the interest rates that we have to pay for autos or mortgage loans. The discount rate is the rate that the Federal Reserve Bank charges to banks and other financial institutions to borrow short-term funds directly from the central bank. (Heyne, 352) The discount rate affects the rates these financial institutions...
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...to Federal Reserve Policy? Ben S. Bernanke Kenneth N. Kuttner∗ February 7, 2003 Abstract This paper analyzes the impact of unanticipated changes in the Federal funds target on equity prices, with the aim of both estimating the size of the typical reaction, and understanding the reasons for the market’s response. On average over the May 1989 to December 2001 sample, a “typical” unanticipated 25 basis point rate cut has been associated with a 1.3 percent increase in the S&P 500 composite index. The estimated response varies considerably across industries, with the greatest sensitivity observed in cyclical industries like construction, and the smallest in mining and utilities. Very little of the market’s reaction can be attributed to policy’s effects on the real rate of interest or future dividends, however. Instead, most of the response of the current excess return on equities can be traced to policy’s impact on expected future excess returns. JEL codes: E44, G12. 1 Introduction The reaction of the stock market to monetary policy is clearly a topic of intense interest both to market participants and policymakers. Those holding equities would obviously like to know how possible Federal Reserve actions might affect the value of their portfolios. Similarly, an estimate of the likely effect of policy on asset prices is an important ingredient in assessing the transmission of monetary policy through the “wealth effect.” The size of and of Governors of the Federal Reserve System...
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