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Finance Paper
Finance Writing Assignment

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FIN 302
Instructor
December 9, 2013

Table of Contents
I. CHINA STEPS TOWARD MARKET-BASED INTEREST RATES………………………..3
A. China and Certificates of Deposits……………………………………………………………..3
B. Recent Development……………………………………………………………………………..3
C. Implications……………………………………………………………………………………3-4
D. Comments………………………………………………………………………………………..4

II. FED CLOSES IN ON BOND EXIT…………………………………………………………….5
A. US Bonds…………………………………………………………………………………………..5
B. Recent Development………………………………………………………………………..….5-6
C. Implications……………………………………………………………………...……………….6
D. Comments………………………………………………………………………………………...6

III. WHY THE DOLLAR DOMINATES, AND WHY THAT’S NOT ALL GOOD………..….7

A. US Dollar……………………………………………………………………………………..…..7
B. Recent Development…………………………………………………………………………...7-8
C. Implications………………………………………………………………………………………8
D. Comments……………………………………………………………………………………...…8

IV. UPSTAIRS TRADING DRAWS MORE BIG INVESTORS…………………………..……9

A. Trade……………………………………………………………………………………………..9
B. Recent Development…………………………………………………………………………..…9
C. Implications……………………………………………………………………………………..10
D. Comments……………………………………………………………………………………….10

V. SKY-HIGH STOCKS: A SPLIT DECISION? ………………………………………………11
A. Stock Splits……………………………………………………………………………………...11 B. Recent Development…………………………………………………………………...……11-12
C. Implications………………………………………………………………………….………….12
D. Comments……………………………………………………………………………………….12

References…………………………………………………………………………………………..13

CHINA STEPS TOWARD MARKET-BASED INTEREST RATES

China and Certificates of Deposits
China has not allowed trading of certificates of deposits between banks due to tight controls. China used to fix deposit and lending rates, limiting competition between banks and in effect transferring cash from savers to borrowers because of the artificially low rates. In the past, banks could lend to each other in the interbank market, but there


References: (2013, December 1). In China Interest Rate. Retrieved December 1, 2013, from http://www.tradingeconomics.com/china/interest-rate Chappatta, B. (2013, March 25). Record Build America Bonds Rally Defies Subsidy Cut: Muni Credit.Bloomberg Hilsenrath, J. (2013, December 6). Fed Closes In on Bond Exit. The Wall Street Journal. Retrieved December 8, 2013, from http://online.wsj.com/news/articles/SB10001424052702303722104579242614008515066?mod=WSJ_business_LeftSecondHighlights Hope, B. (2013, December 8). Upstairs Trading Draws More Big Investors. In The Wall Street Journal Li, F., Lee, J., & Liu, L. (2013, September 26). China to Allow Interbank Trading of Certificates of Deposit Bloomberg (n.d.). Retrieved December 8, 2013, from http://en.wikipedia.org/wiki/Strong_dollar_policy Silk, R., & Zhu, G Street Journal.Retrieved December 8, 2013, from http://online.wsj.com/news/articles/SB10001424052702304744304579245692059412548?mod=WSJ_hp_LEFTWhatsNewsCollection Wessel, D That 's NotAll Good. Retrieved December 8, 2013, from http://online.wsj.com/news/articles/SB10001424052702303722104579237853762008142 Zweig, J Retrieved December 8, 2013, from http://blogs.wsj.com/moneybeat/2013/12/06/sky-high-stocks-a-split-decision/?mod=WSJBlog&mod=MarketsMain
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