An Introduction to Financial Markets and Institutions » (2nd Edition)

Maureen Burton received a BA from the University of Missouri at Columbia in 1971, an MA from California State University, Fullerton, in 1979, and a Ph.D.from the University of California at Riverside in 1986. All were in economics. She taught at Chaffey College from 1984 to 1987 and at Cal Poly Pomona since 1987 where she is a full professor, has been Coordinator of the Graduate Program, and is currently chair of the Economics Department. In addition to other publications, she co-authored an introductory text Economics (Harper Collins, 1987) with S. Craig Justice. Her main areas of research include monetary theory and financial markets.

Reynold Nesiba received a BA in economics from the University of Denver in 1989 and an MA (1991) and Ph.D. (1995) in economics from the University of Notre Dame. Since 1995, Dr. Nesiba has been teaching economics at Augustana College in Sioux Falls, South Dakota, where he currently serves as Associate Professor of Economics. Dr. Nesiba has authored and/or co-authored work that appeared in the Journal of Economic Issues, the Journal of Urban Affairs, Cityscape, and the Encyclopedia of Political Economy. In addition, he authored the study guide and test bank for the second edition of Burton and Lombra's The Financial System & the Economy (also published by South-Western/Thomson Learning). Nesiba's current research interests include community reinvestment, discrimination in mortgage lending, subprime mortgage lending, and other finance-oriented topics.

Born in Hamden, Connecticut, Ray Lombra received a BA in Economics from Providence College in 1967 and an MA and Ph.D. from Penn State University in 1971. He served as a senior staff economist atthe Board of Governors of the Federal Reserve System from 1971-1977 and specialized in financial markets analysis and the formulation and implementation of monetary policy. He joined the faculty of Penn State University in 1977, and has taught money and banking at the undergraduate level and monetary theory and policy at the graduate level for 23 years. He is a winner of the College distinguished teaching award for innovations and instruction and is the author and editor of 5 books and over 80 scholarly publications. Articles on monetary policy, the determination of interest rates, stock prices, and exchange rates, financial innovation, globalization, and expectations formation have appeared in leading journals, including the Quarterly Journal of Economics, the Journal of Money, Credit and Banking, the Journal of Monetary Economics, and the Review of Economics and Statistics.

Written for an undergraduate course, this text helps students intuitively understand the workings of contemporary financial markets and institutions without overwhelming them with algebra. Combining financial theory and institutional detail, the text covers financial prices, financial markets, financial institutions, managing financial risk, and domestic and global monetary policy, integrating real-life examples, historical and international perspectives, and projections about the future. Learning features include key terms, review questions, Internet exercises, and boxes on interpreting financial information in newspapers. Burton teaches economics at California State Polytechnic University-Pomona. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Pt. 1 Introduction

Ch. 1 Introduction and Overview 3

Ch. 2 Money: A Unique Financial Instrument 23

Ch. 3 Financial Markets, Instruments, and Market Makers 45

Ch. 4 An Introduction to Financial Intermediaries and Risk 67

Pt. 2 Financial Prices

Ch. 5 Interest Rates and Bond Prices 91

Ch. 6 The Structure of Interest Rates 113

Ch. 7 Market Efficiency and the Flow of Funds Among Sectors 137

Ch. 8 How Exchange Rates Are Determined 157

Pt. 3 Central Banking and Monetary Policy

Ch. 9 The Overseer: The Federal Reserve System 187

Ch. 10 Monetary Policy 209

Pt. 4 Financial Markets

Ch. 11 The Money Markets 239

Ch. 12 The Corporate and Government Bond Markets 267

Ch. 13 The Stock Market 293

Ch. 14 The Mortgage Market 325

Pt. 5 Financial Institutions

Ch. 15 Commercial Banking Structure, Regulation, and Performance 351

Ch. 16 Savings Associations and Credit Unions 375

Ch. 17 Regulation of the Banking System and the Financial Services Industry 399

Ch. 18 Insurance Companies 427

Ch. 19 Pension Plans and Finance Companies 449

Ch. 20 Securities Firms, Mutual Funds, and Financial Conglomerates 473

Pt. 6 Managing Financial Risk

Ch. 21 Financial Instability and Strains on the Financial System 503

Ch. 22 Risk Assessment and Management 527

Ch. 23 Forward, Futures, and Options Agreements 557

Ch. 24 Asset-Backed Securities, Interest Rate Agreements, and Currency Swaps 585

Pt. 7 The International Financial System

Ch. 25 The International Financial System 611

Ch. 26 Monetary Policy in a Globalized Financial System 633

Glossary 653

Index 673