π Section/Student Qs for Lecture 8
Agenda for Saturday Section, July 27 β
- Slide Review, concentrating on the most important and challenging slides from this weekβs lecture.
- Pages about this lecture on this website. Read π§ Getting Oriented for how to find them on the site.
- Solutions for Problem Set 3, Questions 2, 4, 11, and 16.
- We began reviewing solutions at approximately 5:11 pm. You can use the clock on my screen for reference. More info here.
- Solutions for Problem Set 4, Questions 2, 6, 7, 9, and 13.
- We began reviewing solutions at approximately 5:17. You can use the clock on my screen for reference. More info here.
- Office Hours. Click here for notes and timestamps. Email office hour questions to robecon1452@gmail.com and I will cover them next section.
Click here to learn about timestamps and my process for answering questions.
π Questions covered Saturday Section, July 27
Today, we will go over a number of responses to the feedback form at the bottom of every page on my website.
Iβve also added some new functionality, where you can see your question submitted. More importantly, when I cover the question, Iβll add a link to the page where I covered it. That way, you can find the relevant page on the website. From there, you can find the section recording. Here is the link: https://robmunger.com/responses.txt
Please note that for any urgent question, Iβll be able to give a faster response if you just email me the question at robecon1452@gmail.com. The feedback form is meant for feedback about the website, but Iβm also happy to use it to answer student questions. It might just take a little longer!!
Slide 36 of L7
π£ 6:26ish pm
β Can you review slide 36 from Mondayβs lecture?
β in video
π£
β How are losses treated with bonds?
β We covered the relevant homework problem in the recording and gave a complete solution. There is also a page on this site called somethign like Taxes with Discount bonds
π£
β The graph with the IORB (ample reserves)
β Covered this earlier
π£ 6:30
β Bond Dealerβs Bank Balance Sheet: why is there Liabilities: deposits increase by 100k
β When the Fed sells a bond to the bond dealer, the bond dealer must pay. It pays using its deposits at the bond dealerβs bank. In using the deposits, the amount of deposits at the bank decreases.
π£ 6:31
β why Money Multiplier Process or Resource Multiplier Process: reserves in the banking system increase.
β During video, we covered how the fed creates new reserves.
π£
β Inverse relationship between yields and price?
β Covered in video.
π£
β Are you going to cover the Term Structure of Interest Rates from Lecture 7? If you already did I must of missed.
β We did close to the end of the last section recording.
π£
β Second problem here: http://localhost:4321/l7/durationpractice
β Covered this in video.
π£
β What causes reserves in the banking system to increase?
β Covered in video
π£
β Message: Have you posted the solutions video on Canvas yet?
Page URL: https://1452.robmunger.com/l5o/solutionsps3/
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π£
β Message: Hey Rob, link for the spreadsheet is not working.
Page URL: https://1452.robmunger.com/l6/bondsspreadsheet/
β
π£
β Message: Sorry, something went wrong
Our server is having a problem. Weβre working to fix it as soon as we can, so try again in a few minutes.
Page URL: https://1452.robmunger.com/l6/bondsspreadsheet/
β
π£
β Message: Whatβs the difference between yield to maturity and asked yield to coupon maturity?
Page URL: https://1452.robmunger.com/l6/section6/
βDonβt worry about that.
π£
β Message: The RATE() formula requires nper, pmt, pv, [fv], [type], [guess].
Whatβs βtypeβ and βguessβ?
Page URL: https://1452.robmunger.com/l6/bondsspreadsheet/
β You can ignore type and guess.
π£
β Message: type II: find r_m
βNote: π_π here is essentially the βafter taxβ rate.β What does this mean?
Page URL: https://1452.robmunger.com/l6/taxexemptbondex/
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π£
β Message: Why do people in the higher tax bracket prefer muni?
Page URL: https://1452.robmunger.com/l6/taxexemptbondex/
β Because interest income is taxed at the regular tax rate (ie the rate of your tax bracket), people in higher tax brackets pay higher rates on income from bonds. Therefore, they will prefer the tax advantages of munis.
π£
β Message: How to calculate before-tax holding-period return?
Page URL: https://1452.robmunger.com/l6/section6/
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π£
β Message: When calculating the bond price using the short cut; if the bond pays once per year % , r value is it full interest or half as was presented in the slides?
Page URL: https://1452.robmunger.com/l6/section6/
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π£
β Message: Can we have Pre-tax and after tax examples? Holding period examples?
Page URL: https://1452.robmunger.com/l6/section6/
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s1452 Help Links: π¨βπ»
- General Info on sections and using this website.
- Email office hour questions to robecon1452@gmail.com. PS1Q2=βQuestion 2 of Problem Set 1β
- Slides with handwriting from section and other useful files