Major Determinants of Interest Rates Inflation Inflation is a factor that decisively affects the nature or outcome of interest rates. “Inflation is an increase in prices of goods and services over time”(Financial Institutions‚ Instruments and Markets‚ 2012). Inflation is the natural byproduct of a robust‚ growing economy. No inflation‚ or deflation (the lowering of prices)‚ is actually a much worse economic indicator. Also‚ in a healthy economy‚ wages rise at the same rate as prices. A standard
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BUSINESS IMPLICATIONS OF EXCHANGE-RATE CHANGES BUSINESS IMPLICATIONS OF EXCHANGE-RATE CHANGES Market Decisions On the marketing side‚ exchange rates can affect demand for a company’s products at home and abroad. A country such as Mexico may force down the value of its currency if its exports become too expensive owing to relatively high inflation. Even though inflation would cause the peso value of the Mexican products to rise‚ the devaluation means that it takes less foreign currency to
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International Journal of Global Business‚ 7 (1)‚ 59-76‚ June 2014 59 Examining the Effects of Currency Depreciation on Trade Balance in Selected Asian Economies Alemu‚ Aye Mengistu Assistant Professor‚ SolBridge International School of Business‚ Daejeon‚ South Korea. ayem2011@solbridge.ac.kr Jin-sang‚ Lee Specialist Professor‚ Duksung Women’s University‚ Seoul‚ South Korea. jinslee0209@duksung.ac.kr Abstract The aim of this study is to investigate how depreciation could affect the export
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Project report On Rate of Exchange and Foreign Investment The Indian case from 2009-10 to 2011-12 Acknowledgement As a part of PGDM curriculum at Birla Institute of Management Technology‚ the preparation of this project report has been a unique and rewarding experience. Apart from our efforts‚ the success of any project depends largely on the encouragement and guidelines of many others. We take this opportunity to express our gratitude to the people
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THE EFFECTS OF EXCHANGE RATE IN INFLATION OUTPUT AND THE CURRENT ACCOUNT ABSTRACT The empirical studies on the effects of changes in exchange rates on inflation and real activity can be broadly divided into four categories: Single-equation econometric methods‚ Vector autoregressive (VAR) models‚ Structural macro econometric models and DSGE models - Dynamic stochastic general equilibrium. Methodologies: First‚ most participants use single-equation econometric methods that estimate
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The term structure of interest rates‚ also known as the yield curve‚ is a very common bond valuation method. Constructed by graphing the yield to maturities and the respective maturity dates of benchmark fixed-income securities‚ the yield curve is a measure of the market’s expectations of future interest rates given the current market conditions. Treasuries‚ issued by the federal government‚ are considered risk-free‚ and as such‚ their yields are often used as the benchmarks for fixed-income securities
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a more socialized market influenced system of governance. While this transition has provided the impetus for their growth‚ their transition is far from complete and is beset
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Limitations…………………………………………………………….3 Methodologies……………………………………………………………………...3 Interest rate and its determinants…………………………………………………3-5 Analysis of regression equation………………………………………………….6-7 Analysis of correlation matrix……………………………………………………7-8 Conclusion…………………………………………………………........................8 Bibliography……………………………………………………………………….8 Determinants of Interest Rates in Bangladesh Executive Summary: Interest rate is applicable on all type of lending allover the world. Lending can be of
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Understanding the Term Structure of Interest Rates Prepared for Fundamentals of Financial Management Distributed October 24‚ 2005 TABLE OF CONTENTS List of Figures....................... ....................................... .....................iii List of Abbreviations and Symbols............................. ..........................iv Summary.............................................
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of 72? Well… here’s the equation: Years to double = 72 / Interest rate DO NOT reread this equation. The rule of 72 is a hard rule to explain. I will do my best to try to explain it. The answer to ‘rule of 72’ gives us a number of years. This number of years tells us how long it takes to double our money. Let’s say you have 100 dollar. The ‘rule of 72’ helps us figure out how long it will take to have 200 dollars. Scenario 1: You have invested your 100 dollars in a 3% certificate of
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