theresidentialmortgagemarket(编辑修改稿)

theresidentialmortgagemarket(编辑修改稿)内容摘要：

overnment Involvement in the Mortgage Market  The Creation of Fannie Mae (FNMA)  The Creation of Ginnie Mae (GNMA)  The Federal Home Loan Mortgage Corporation (FHLMC)  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 22 Chapter Review  Innovations in Mortgage Instruments  VariableRate and Adjustable Mortgage Instruments  Convertible Mortgages  ReverseAnnuity Mortgages  Mortgage Lockins  Refinancing Home Mortgages and Home Equity Loans  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 23 Money and Capital Markets 5 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose Slide by YeeTien (Ted) FuThe Determinants of Interest Rates: Competing Ideas  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 24  Learning Objectives   To understand the important roles and functions that interest rates perform within the economy and the financial system.  To explore the most important ideas about the determinants of interest rates and asset prices.  To identify the key forces that economists believe set market interest rates and asset prices into motion.  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 25 Introduction  The acts of saving and lending, and borrowing and investing, are significantly influenced by and tied together by the interest rate.  The interest rate is the price a borrower must pay to secure scarce loanable funds from a lender for an agreedupon time period.  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 26 Functions of the Interest Rate in the Economy  The interest rate helps guarantee that current savings will flow into investment to promote economic growth.  It rations the available supply of credit, generally providing loanable funds to those investment projects with the highest return.  It brings the supply of money into balance with the public’s demand for money.  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 27 Functions of the Interest Rate in the Economy  The interest rate serves as an important tool for government policy through its influence on the volume of savings and investment.  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 28 The Classical Theory of Interest Rates  The classical theory argues that the rate of interest is determined by two forces:  the supply of savings, derived mainly from households, and  the demand for investment capital, ing mainly from the business sector.  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 29 The Classical Theory of Interest Rates Household Savings  Current household savings equal the difference between current ine and current consumption expenditures.  Individuals prefer current over future consumption, and the payment of interest is a reward for waiting.  Higher interest rates encourage the substitution of current saving for current consumption.  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 30 The Classical Theory of Interest Rates The Substitution Effect Relating Savings and Interest Rates Interest Rate Current Saving  r1 S1  r2 S2  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 31 The Classical Theory of Interest Rates Business and Government Savings  Most businesses hold savings balances in the form of retained earnings, the amount of which is determined principally by business profits, and to a lesser extent, by interest rates.  Ine flows in the economy and the pacing of government spending programs are the dominant factors affecting government savings (budget surplus).  2020 by The McGrawHill Companies, Inc. All rights reserved. McGraw Hill / Irwin 24 32 The Classical Theory of Interest Rates The Demand for Investment Funds  Gross business investment equals the sum of replacement investment and investment.  The investment decisionmaking process typically involves the calculation of a project’s expected internal rate of return, and the parison of that expected return with the anticipated returns of alternative pro。