Appendix 1: Materials used by Mr. Kos

November 6, 2002 112 of 122

Page 1

PercentPercent

U.S. Current Deposit Rates and RatesImplied by Traded Forward Rate Agreements

June 03, 2002 - November 04, 2002

Source: Bloomberg1.00

1.50

2.00

2.50

3.00

3.50

6/3 6/17 7/1 7/15 7/29 8/12 8/26 9/9 9/23 10/7 10/21 11/41.00

1.50

2.00

2.50

3.00

3.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6/3 6/17 7/1 7/15 7/29 8/12 8/26 9/9 9/23 10/7 10/21 11/40.5

1.0

1.5

2.0

2.5

3.0

3.5

Duration of Lehman Brothers Mortgage Index and the 10-Year Treasury YieldJune 03, 2002 - November 04, 2002 YearsPercent

Source: Lehman Brothers, Bloomberg

10-Year Treasury Yield (LHS)

S&P 500 Price and 10-Year Note Yield Changes100-Day Rolling Correlation

-1.0

-0.5

0.0

0.5

1.0

Jan-88 Jan-90 Jan-92 Jan-94 Jan-96 Jan-98 Jan-00 Jan-02-1.0

-0.5

0.0

0.5

1.0

FOMCAug. 13

FOMCSept. 24

FOMCSept. 24

FOMCAug. 13Duration of Lehman Brothers

Mortgage Index (RHS)

Source: Bloomberg

LIBOR Fixing 3M Forward 6M Forward 9M Forward

WashingtonPost articleOct. 26

November 6, 2002 113 of 122

Page 2

U.S. Investment Grade Option-Adjusted SpreadJanuary 02, 2002 - November 04, 2002

Basis Points

140160180200220240260280

Jan-02 Apr-02 Jul-02 Oct-02140160180200220240260280

Source: Lehman Brothers

550

650

750

850

950

1050

Jan-02 Apr-02 Jul-02 Oct-02550

650

750

850

950

1050Source: Merrill Lynch

U.S. High Yield Spread to 10-Year TreasuryJanuary 02, 2002 - November 04, 2002

Basis Points Basis Points Basis Points

Corporate Credit Spreads to U.S. Treasuries

0%

10%

20%

30%

40%

50%

60%

0-100 100-200 200-300 300-400 400+0%

10%

20%

30%

40%

50%

60%10/25/200010/25/200110/25/2002

Basis Points Basis Points Basis Points Basis Points Basis Points

PercentPercentSource: Merrill LynchInvestment Grade Index

Percent of Investment Grade Debt Outstanding Categorized byOption-Adjusted Spread to Comparable Treasuries

0

100

200

300

400

500

600

700

Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 Oct-02 Nov-020

100

200

300

400

500

600

700Ford (1st largest issuer)GM (3rd largest)Household Finance (6th largest)AT&T (9th largest)

Select Large Corporate Bond Issuers: 10-Year Spreads to Treasuries January 02, 2002 - November 04, 2002 Basis PointsBasis Points

Source: Lehman Brothers

November 6, 2002 114 of 122

Page 3

0

50

100

150

200

250

300

Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-020

50

100

150

200

250

300

Index of Euro Corporate Spreads to Comparable German Government DebtJanuary 02, 2001 - November 04, 2002 Basis

PointsBasisPoints

Source: JP Morgan

AA

BBB

A

AAA

0

10

20

30

40

50

Jan-01 May-01 Sep-01 Jan-02 May-02 Sep-020

10

20

30

40

50

Monthly Euro-Denominated Investment Grade Corporate IssuanceJanuary 2001 - October 2002 USD Billions

EquivalentUSD BillionsEquivalent

Source: Morgan Stanley

Euro-Area Current Deposit Rates and RatesImplied by Traded Forward Rate Agreements

June 03, 2002 - November 04, 2002

2.50

3.00

3.50

4.00

4.50

6/3 6/17 7/1 7/15 7/29 8/12 8/26 9/9 9/23 10/7 10/21 11/42.50

3.00

3.50

4.00

4.50

Source: Bloomberg

Percent PercentLIBOR Fixing 3M Forward 6M Forward 9M Forward

November 6, 2002 115 of 122

0.9

1.0

1.1

1.2

1.3

1.4

1.5

6/3 6/17 7/1 7/15 7/29 8/12 8/26 9/9 9/23 10/7 10/21 11/40.9

1.0

1.1

1.2

1.3

1.4

1.5

Japanese Government 10-Year Benchmark YieldJune 03, 2002 - November 05, 2002

Page 4

PercentPercent

40

50

60

70

80

90

100

110

6/3 6/17 7/1 7/15 7/29 8/12 8/26 9/9 9/23 10/7 10/21 11/440

50

60

70

80

90

100

110

Topix Bank Index UFJMTFG SumitomoMizuho

Japanese Bank StocksJune 03, 2002 - November 05, 2002 Index

6/3/02=100Index6/3/02=100

Source: Bloomberg

Source: Bloomberg

BOJ stockpurchase planSept. 18

BOJ stockpurchase planSept. 18

Cabinet reshuffleSept. 30

Cabinet reshuffleSept. 30

BOJ & FSAannouncements

Oct. 30

BOJ & FSAannouncements

Oct. 30

November 6, 2002 116 of 122

575

600

625

650

675

2/6/2002 4/9/2002 6/10/2002 8/11/2002 10/12/2002 12/13/2002575

600

625

650

675

Permanent SOMA

Long-Term RPs

Short-Term Operations

Total Domestic Portfolio: Permanent SOMA Holdings, Long-Term RPs,and Short Term Operations (RPs less Matched Sale-Purchase Agreements)

Maintenance Period Averages, Billions of DollarsFebruary 2002 to February 2003

Level of Entire Portfolio (reflects levelof all autonomous factors plus requiredand excess Fed balances)

Actual

Forecast

Page 5

2/5/2003

November 6, 2002 117 of 122

Appendix 2: Materials used by Mr. Reinhart

November 6, 2002 118 of 122

November 6, 2002 119 of 122

November 6, 2002 120 of 122

November 6, 2002 121 of 122

November 6, 2002 122 of 122