PART I. FOUNDATIONS 1. Introducing Money and the Financial System 2. Money and the Payments System 3. Interest Rates and Rates of Return 4. Determining Interest Rates   PART II. FINANCIAL MARKETS 5. The Risk Structure and Term Structure of Interest Rates 6. The Stock Market, Information, and Financial Market Efficiency 7. Derivatives and Derivative Markets 8. The Market for Foreign Exchange   PART III. FINANCIAL INSTITUTIONS 9. Transactions Costs, Asymmetric Information, and the Structure of the Financial System 10. The Economics of Banking 11. Investment Banks, Mutual Funds, Hedge Funds, and the Shadow Banking System 12. Financial Crises and Financial Regulation   PART IV. MONETARY POLICY 13. The Federal Reserve and Central Banking 14. The Federal Reserve’s Balance Sheet and the Money Supply Process 15. Monetary Policy 16. The International Financial System and Monetary Policy PART V. THE FINANCIAL SYSTEM AND THE MACROECONOMY 17. Monetary Theory I: The Aggregate Demand and Aggregate Supply Model 18. Monetary Theory II: The IS—MP Model