Q: Bhupatbhai
A: Future Value = fv = $230,000Present Value = pv = $41,000Interest Rate = r = 4.5%
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Q: klp.1
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A: Deposit amount = $7,000Annual interest rate = 12%Number of years = 4 years
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Q: Vijay
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Q: man.1
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How/what did Nvidia do during the COVID crisis and the subsequent inflationary and interest rate surges?
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- How do investors deal with inflation when they determine interest rates in the financial markets?What is the role of the Federal Reserve with interest rates during a recession?Would you recommend that financial institutions increase or decrease their concentration in long-term bonds based on this expectation that the inflation is expected to decline in the near future? Explain.
- Explain on the effects of rising inflation rates on the economy. How can the rising inflation rate be controlled effectively?Why should we care what the Term Structure of Interest Rates looks like? The Expectations Theory of the Term Structure of Interest Rates implies that the term structure is the result of expected inflation rates in the future. What else might cause the term structure to be what it is, that might not be in the Expectations Theory?What happens to market-clearing, or equilibrium, interest rates in a capital marketwhen the supply of funds declines? What happens when expected inflationincreases or decreases?
- What caused the Collapse of 2008 in the Financial Markets? How did interest rates contribute to the Collapse? What did the Federal Reserve do to help the economy recover?If interest rates increase because of a previously unanticipated inflation rate risk? long-lived debt instruments will decline more than short-lived debt instruments long-lived debt instruments will decline less than short-lived debt instruments neither set of debt instruments will decline all other things being equal, both should decline equallyHow do risk and inflation impact interest rates in the economy?
- Assume that inflation is expected to rise soon. How could this affect future bond prices? Would you recommend that financial institutions increase or decrease their concentration in long-term bonds based on this expectation?Federal Reserve impact on inflation, growth and exchange rates: What happens to inflation, growth and exchange rates when the Federal Reserve decrease the required reserve ratio?How is the market interest rate in the short-term and long-term financial market affected under the Pure Expectations theory when suppliers and users of loanable funds expect that interest rates will decrease the next year?