When interest rates decrease, how might businesses andconsumers change their economic behavior?

Q: rates affect business? Consumers?

A: Market interest rate plays extremely essential part in the business and customer spending in light…

Q: What is the relationship between risk and return in finance? Why does this relationship hold in the…

A: A return refers to the additional net revenue received from the investment. Risk refers to the…

Q: Draw the demandand supply curves forthe bond market, andidentify the equilibrium interest rate.

A: The equilibrium interest rates for bonds can be determined when demand for and supply of bonds are…

Q: If you are a banker and expect interest rates to rise inthe future, would you prefer to make…

A: Interest is the cost of capital. We can use interest in the context of either borrowed funds (or…

Q: Deliberate specifally how and through which channelss the interest rate affects (negatively or…

A: Interest rates can impact the economic activities in different ways. When the interest rates are…

Q: Mr. John Dela Cruz, wanted to start investing in the stock market, which of the following financial…

A: In a market, there are different industries and different types of markets for different types of…

Q: What are the major economic functions of the interest rate? How might the fact that many businesses…

A: Answer - Major economic functions of the interest rate :- The interest rate has many economic…

Q: Bond A pays $8,000 in 20 years. Bond B pays $8,000 in 40 years. (To keep things simple, assume these…

A: The number of years (n) required to double the investment can be calculated by using the following…

Q: Describe how interest could be  good or bad, depending on the situation, and explain why interest…

A: If properly managed, a LOW INTEREST RATE can be beneficial. Low interest rates reduce demand for the…

Q: If the Federal Reserve wants to set an interest rate that best promotes economic growth and new…

A: Answer - Need to find - factors should they consider Given in the question- If the Federal Reserve…

Q: ark

A: An interest rate is the percentage of principal being charged by the lender for using of its…

Q: Investors must go for investments that are liquid to ensure availability of funds when needed.  Is…

A: Liquidity is defined as the ability to exchange assets for cash. The more easier it is to convert an…

Q: How do the sophisticated financial systems of modern economies affect the relationship between…

A: Financial markets (such as those in which stocks or bonds are traded), securities (from bank CDs to…

Q: what happens when interest rate rises?

A: In an economy interest rate plays an important role to determine economic growth and inflation rate.…

Q: Is the stock market "out of control?" How can the poor benefit from this financial institution?

A: A company or institution which is involved in the financial activities of the economy like,…

Q: Market interest rates are established by the banks or any financial institutions. True or false?

A: Answer -  Market Interest rate - It is the interest rate given on the deposits or other investments…

Q: Why is it important for people who own stocks and bonds to diversify their holdings? What type of…

A: System that permits exchange of funds between the borrowers, investors and lenders via the medium of…

Q: Can the risk of a housing bubble be averted?

A: The housing bubble caused the economic recession in the 2007 which turned out to be the biggest…

Q: If the yield curve suddenly became steeper, how wouldyou revise your predictions of interest rates…

A: The yield curve represents the relationship between the yields of fixed interest securities and…

Q: What might cause interest rates to be low one year and high the next?

A: Interest rates are best thought of as the "cost of money." If a borrower wishes to spend more money…

Q: what are the economic goals of a low-interest rate?

A: The presence of interest helps borrowers to spend money right away rather than waiting to save up…

Q: How the time based term effects interest rates and its yield curve?

A: A yield curve is a graph that compares the yields (interest rates) of bonds with similar credit…

Q: How do economists define equilibrium in financial markets?

A: The price is the difference between what providers receive and what demanders pay in any market.…

Q: For each of the following pairs, which bond wouldyou expect to pay a higher interest rate?…

A: a) Risk and return are directly related. The higher the risk, the more would be the return. In this…

Q: List the main function of investment banks in the financial system?

A: Investment banks are the banks that help startup companies to launch. It acts as an intermediary…

Q: (a) You hold a consol that pays a coupon C in perpetuity. The current interest rate is i, and the…

A: (a) Given information: Current interest rate = i Coupon received in perpetuity = C The price of…

Q: Do the financial institutions usually quote the interest rate on an annual basis?

A: The interest rate is a specific percentage of principal that must be paid by a borrower of money to…

Q: Can a financial market be complete and allow for arbitrage opportunities at the same time?

A: Arbitrage is a speculation technique where a financial backer all the while trades a resource in…

Q: The discount rate will never be equal to interest rate. True or False?

A: Discount rate is defined as the rate of interest which is charged to commercial banks and other…

Q: What is importance of financial markets for the productive capacity of the economy?

A: The economies work with the motive of increasing, or enhancing their overall economic growth, and…

Q: In saving drepped sharply in the economy, what would be likely to happen to investiment? Why

A: In equilibrium, planned saving equals planned investment.

Q: How can financial institutions overcome the inevitable mobility of students after graduation?

A: A financial institution is an organization that deals in several forms of monetary transactions,…

Q: What group of people benefits from a higher interest rate? Explain how they benefit

A: Interest is the opportunity cost of holding money.

Q: Suppose that the interest rate is 5 percent. Enter your answers rounded to 2 decimal places. A.…

A: Future vale refers to the amount today that will be worth at a certain point in the future

Q: Give an example of a risk-free interest rate?

A: The rate of return on an investment that is theoretically devoid of any risk is known as the…

Q: what are the economic goals of high-interest rate?

A: The interest rate is a proportion of the principal, which is the amount borrowed, that a lender…

Q: Raphael observes that at the current level of interest ratesthere is an excess supply of bonds, and…

A: The bonds and shares of a company will be purchased on the basis of the available information such…

Q: a) You hold a consol that pays a coupon C in perpetuity. The current interest rate is i, and the…

A: Given: Consol that pays a coupon (C) in the perpetuity  The current interest rate is: i The…