What is the difference between the stated interest rate and the market interest rate?

Q: What is the two-step process can which performs deflation and discounting in market interest rate?

A: The two-step process which performs deflation and discounting is that it makes the cash flows…

Q: Define term structure of interest rates

A: The term structure of interest rates generally alluded to as the yield curve, portrays the coupon…

Q: The difference between the nominal interest rate and the effectiveinterest rate.

A: The nominal interest rate is the interest rate paid annually without compounding period.  The…

Q: What is marginal rate (for debt)?

A: Marginal rate of debt is the rate of interest expected by the investors on their debt instruments…

Q: What the different between rate interest و interest value ؟؟!!

A: The rate interest indicates the cost of borrowing or earnings on deposit in the percentage of the…

Q: What interest rates should be used in determining the amount of interest to be capitalized? How…

A:

Q: How do risk and inflation impact interest rates in the economy?

A: Introduction: The inflation needs to be adjusted in the interest rate of mortgage payments. Due to…

Q: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: What is an interest rate swap?

A: Swap is a derivative instrument where two parties agree to exchange payment responsibility on two…

Q: What are the contract rate and the market rate for bonds?

A:

Q: How to calculate Present Value Interest Factors?

A: PVIF is known as Present Value Interest Factor. PVIF refers to a factor that is very useful in…

Q: How does risk affect interest rates?

A: The risk and the interest rates are in a direct relationship that is, the greater the risk the…

Q: How does inflation affect interest rates, security prices, and financial planning?

A: Inflation is the situation in the economy due to which prices of goods and services increases, as a…

Q: Illustrate the very important relationships between changes in interest rates and varying rates of…

A: It illustrates an inverse relationship amongst the change in the interest rate and the varying…

Q: Which factor determines how much will be saved at different interest rates?

A: The time preference of the consumer for consumption helps in determining the amount that will be…

Q: What is the difference between the stated interest rate andthe market interest rate on a bond?

A: Interest: It can be defined as the cost that is paid by the borrower for using the money borrowed…

Q: What is risks and interest rate

A: Risks and interest rate are tied together in case of fixed income instruments like bonds.

Q: When is it recommended to compute the effective interest rate per payment period?

A: When there is a compounding of interest, then the EIR per payment period is recommended. As it is a…

Q: How is Compound Interest calculated?

A: Compound interest refers to the addition of interest amount to the principal. The concept of…

Q: How can we determine the Net Present-Worth Amounts at Varying Interest Rates?

A: Answer: Net present worth is an estimation method applied to various time intervals when cash flows…

Q: Which one of the theories states that “the rate of interest is set in the market for money…

A: Interest rates are fluctuated based on different parameters of the economy. There are different…

Q: What is the Relationship between Changes in Interest Rates, Investor Returns, and “Going-In”Cap…

A: The question is based on the concept of relation between change in interest rate and its impact on…

Q: Illustrate with examples , that Interest rate is equivalent to the savings rate from the deposits?

A: Interest received It is the amount that is received to a person for the investment made. A rate at…

Q: Can the actual real rate of interest be negative? When ? Can the expected real rate be negative?

A: Yes, the actual real interest rate can be negative. This can happen when the actual inflation rate…

Q: What is “imputed interest”? In what situations is it necessary to impute an interest rate for notes…

A: Imputed Interest: According to the Internal Revenue Service (IRS), an imputed interest is an…

Q: What effect does relative inflation have on interestrates and exchange rates?

A: Inflation is general increase in the prices. Inflation directly affects the exchange rate and…

Q: Explain the prime interest rate.

A: Interest are generally charged on the loans. Borrowers are needed to pay the interest to the person…

Q: Why there is a difference between the interest rate and the APR

A: Interest rates and APR are two phrases that are sometimes used interchangeably to refer to…

Q: sly. What is the effective interest rate e

A: Introduction: Effective interest rate also known as effective annual rate(EAR)  is the interest that…

Q: Why is the U.S. Treasury yield considered the base interest rate?

A: Bondholders, higher than any other form of the investor, are concerned about future interest rates.…

Q: How is the PW analysis dependent on the rate of interest used for the PW computation?

A: Net present value (or) PW analysis is one of the capital budgeting techniques. When a company is…

Q: Why do most firms use a market interest rate?

A: The effective annual rate of interest is the actual or the real rate of interest paid or received…

Q: The nominal interest rate is

A: Introduction: Nominal interest rate can be defined as the rate of interest that is advertised or…

Q: Explain Nominal and real interest rates.

A: Inflation: Inflation is the speed of increase in costs throughout a given time span. Inflation is…

Q: What is the relationship between interest rate level and bond price? Why must this relationship be…

A: Bonds are a type of long-term debt often offered by government and corporations to raise loan.

Q: What are the forward rates of interest? How are they determined? What do they have to do with…

A: Forward rates of interest has basis as expectation of future interest rate that are implied in the…

Q: What is the difference between a fixed rate and an adjustable rate money market instrument?

A: Money Market instruments are the financial instruments available to the investor for the short term…

Q: How can we compare interest rates that are compounded differently?

A: Solution Concept interest rates that are compounded differently               The number of…

Q: By which symbol is the break-even interest rate denoted?

A: Break-even interest rate is the maximum rate of interest before negative leverage.

Q: What makes it so difficult to correctly forecast interest rate changes?

A: Interest rates are used to understand price and value of money. Interest rate is the cost incurred…

Q: How is NPW used as a Function of Interest Rate?

A: Present value computes the existing value of future benefits by discounting future worth with a…