Module learning outcomes assessed by this task:1. (MO1) Understand and critically analyse the operation, mechanism, and structure of the markets of debt, equity, derivatives, and foreign exchange.2. (MO2) Apply the theory of interest rate, term structure, asset valuation and foreign exchange rate to interpret economic and financial information and predict future movement of various financial instruments.3. (MO4) Critically analyse the causes of the recent financial turmoil and analyse on-going changes to the UK and international financial and banking system.Completing your assessment What am I required to do on this assessment?You are required to write an essay up to 2,000 words to answer the following question:Did the US Federal Reserve’s Quantitative Easing programme succeed in bringing down U.S. long-term interest rates between 2008 and 2014?The essay should address various aspects of US Federal Reserve’s Quantitative Easing (QE) programme. You are encouraged to use the following sub-headings to ensure full coverage of all relevant aspects and clear presentation of the contents.1. Introduction. An overview of the essay is expected at the beginning of the essay, outlining all the aspects covered and providing a roadmap for readers.2. Motivation. Explain what Quantitative Easing is and the specific problem it is designed to solve when conventional monetary policy is deemed ineffective.3. Timeline. Describe US Federal Reserve’s multiple rounds of Quantitative Easing programme between 2008 and 2014, including the timing, financial assets purchased, size etc.4. Rationale. Explain how QE could bring down long-term interest rates. This section is very important to the essay and should be allocated with sufficient proportion of word limit. It can be further divided into at least two sub-sections, corresponding to the channels through which QE is supposed to affect long-term interest rates. Furthermore, you should apply the theories of term structure of interest rates when discussing the channels.5. Evidence. Collect and present secondary data from financial markets to show if the announcements and implementation of quantitative easing programme coincided with the falls in long-term interest rates. Furthermore, review the empirical research conducted by academics and policy makers and present their findings to demonstrate in-depth and thorough understanding of the practical significance of the channels.6. Conclusion. Highlight the findings of the essay.
