Chapter 5 : Interet rates Page161 Interest rate quotes and adjustments 5-1. Your bank is offering you an account that will pay 20% interest in total for a two-year deposit. Determine the equivalent discount rate for a period length of a. Six months. b. One year. c. One month. a. Since 6 months is [pic] of 2 years‚ using our rule [pic] So the equivalent 6 month rate is 4.66%. b. Since one year is half of 2 years [pic] So the equivalent 1 year rate is 9.54%. c. Since
Premium Compound interest Time value of money Debt
monetary policy rule‚ it will Answer aggressively increase inflation if the interest rate exceeds the target interest rate. aggressively increase interest rates if the inflation rate exceeds the target inflation rate. only slightly increase inflation if the interest rate exceeds the target interest rate. only slightly increase interest rates if the inflation rate exceeds the target inflation rate. During the Christmas shopping season the demand for money increases significantly
Premium Central bank Monetary policy Inflation
real term Bangladesh ’s economy has grown 5.8% per year since 1996‚ despite political instability‚ poor infrastructure‚ corruption‚ insufficient power supplies‚ and slow implementation of economic reforms. Bangladesh remains a poor‚ overpopulated‚ and inefficiently governed nation. Although more than half of GDP is generated through the service sector‚ 45% of Bangladeshis are employed in the agriculture sector with rice as the single-most-important product. Bangladesh ’s growth was resilient during
Premium Economics Gross domestic product Economic growth
CHAPTER 1 INTRODUCTION Losing one’s job is the most upsetting thing that an individual can go through short of the loss of a loved one. Economists therefore consider the unemployment rate to be one of the most important indicators both of the economy and of well-being in general. When people who want and need to work cannot find suitable employment‚ they lose not only income but self-esteem (Robert Guell‚ 2003). According to Merriam-Webster Dictionary‚ labor is a human activity that provides
Free Unemployment Economics
between exchange rates‚ interest rates • In this lecture we will learn how exchange rates accommodate equilibrium in financial markets. For this purpose we examine the relationship between interest rates and exchange rates. Interest rates are the return to holding interest-bearing financial assets. In the previous lecture we have pointed out that as being a financial asset exchange rates tend to adjust more quickly to new information that goods prices. Like exchange rates‚ interest rates are also the prices
Premium Forward contract Exchange rate Foreign exchange market
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
Premium Bond
CHAPTER 14 INTEREST RATE AND CURRENCY SWAPS SUGGESTED ANSWERS AND SOLUTIONS TO END-OF-CHAPTER QUESTIONS AND PROBLEMS QUESTIONS 1. Describe the difference between a swap broker and a swap dealer. Answer: A swap broker arranges a swap between two counterparties for a fee without taking a risk position in the swap. A swap dealer is a market maker of swaps and assumes a risk position in matching opposite sides of a swap and in assuring that each counterparty fulfills its contractual obligation
Premium United States dollar Currency Bond
ECON 1. (Demand Under Perfect Competition) what type of demand curve does a perfectly competitive firm face? Why? A horizontal or a perfectly elastic‚ demand curve. A perfectly competitive firm is called a price taker because that firm must “take‚” or accept‚ the market price- as in “take it or leave it.” 2. Explain the different options a firm has to minimize losses in the short run. A firm in perfect competition has no control over the market place. Sometimes that price may be so low
Premium Economics
Introduction In the recent economic downturn‚ many companies collapsed‚ resulting in many jobless workers. Corporations‚ in order to survive the downturn reduced their head counts by retrenching. The unemployed couldn’t find jobs as companies are not hiring due to the pessimism of the economy. This hence attributes to the unemployment rate which has reached the highest in n the United States since 1983. Unemployment rate has always been one of the key economic indicator that investors and traders
Premium
lower their suicide rates. Countries like China‚ Japan‚ Singapore‚ Australia & Pakistan have joined the project‚ Strategies to Prevent Suicide (STOPS)‚ in order to lessen their increasing number of suicide. However‚ in trying to prevent the increase in number of suicide deaths and attempts‚ one must know what the leading causes of it are. Suicide rates change over time‚ and the factors influencing them remain poorly understood. Economic factors‚ in particular unemployment & income growth‚ have
Premium Suicide Regression analysis