The comparison between the interest rates available at different places. Introduction: Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

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Answer 1

Question

Chapter 6, Problem 1Q

Summary Introduction

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Expert Solution & Answer

Answer to Problem 1Q

Yes, the difference of the residential mortgage rates of two different cities can be persisted.
There are certain forces like demand and supply that can lead to the rates to be equal.
No, the cost of money borrows for the business purpose doesn’t lead to the same risk as the money should be borrowed from the place which charges the less interest.
The large firms of the NY and C will prefer to take loan which has the less cost of money.
To borrow the money the less interest rate is better and to invest the money high interest rate is better.

Explanation of Solution

The differences of the interest rates totally depend upon the demand or supply of the financial product that prevail in the market.
The increase in supply leads to decrease in the interest rate of New York and rates would be equalized.
The increase in demand leads to increase in the interest rate of New York and rates would be equalized.
The businesses might take into consideration of the cheapest available mortgages.
The center which provides the money at the lowest possible cost should be preferred by the large business firms and the interest rates will be equalized and small firms will be able to get the loan at the lowest cost.

Conclusion

Hence, to invest money the higher interest rate should be preferred and to borrow the money lower interest rate should be preferred and these interest rates has an effect from the demand and supply of product.

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Students have asked these similar questions

Explain why the return associated with an investment includes both the income paid by the issuer and the change in value associated with the investment. Suppose interest rates on residential mortgages of equal risk were 8 percent in California and 10 percent in New York. a.Could this differential persist? What forces might tend to equalize rates? b.Would differentials in borrowing costs for businesses of equal risk located in California and New York be more or less likely to exist than differentials in residential mortgage rates? Would differentials in the cost of money for California and New York firms be more likely to exist if the firms being compared were very large or very small? c. What are the implications of the trend for financial institutions to become large mega banking organizations and to engage in nationwide branching? Which fluctuate more, short-term or long-term interest rates? Why? Suppose a new process was developed that could be used to make oil out of seawater. The…

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Answer 2

Question

Chapter 6, Problem 1Q

Summary Introduction

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Expert Solution & Answer

Answer to Problem 1Q

Yes, the difference of the residential mortgage rates of two different cities can be persisted.
There are certain forces like demand and supply that can lead to the rates to be equal.
No, the cost of money borrows for the business purpose doesn’t lead to the same risk as the money should be borrowed from the place which charges the less interest.
The large firms of the NY and C will prefer to take loan which has the less cost of money.
To borrow the money the less interest rate is better and to invest the money high interest rate is better.

Explanation of Solution

The differences of the interest rates totally depend upon the demand or supply of the financial product that prevail in the market.
The increase in supply leads to decrease in the interest rate of New York and rates would be equalized.
The increase in demand leads to increase in the interest rate of New York and rates would be equalized.
The businesses might take into consideration of the cheapest available mortgages.
The center which provides the money at the lowest possible cost should be preferred by the large business firms and the interest rates will be equalized and small firms will be able to get the loan at the lowest cost.

Conclusion

Hence, to invest money the higher interest rate should be preferred and to borrow the money lower interest rate should be preferred and these interest rates has an effect from the demand and supply of product.

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Answer 3

Question

Chapter 6, Problem 1Q

Summary Introduction

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Expert Solution & Answer

Answer to Problem 1Q

Yes, the difference of the residential mortgage rates of two different cities can be persisted.
There are certain forces like demand and supply that can lead to the rates to be equal.
No, the cost of money borrows for the business purpose doesn’t lead to the same risk as the money should be borrowed from the place which charges the less interest.
The large firms of the NY and C will prefer to take loan which has the less cost of money.
To borrow the money the less interest rate is better and to invest the money high interest rate is better.

Explanation of Solution

The differences of the interest rates totally depend upon the demand or supply of the financial product that prevail in the market.
The increase in supply leads to decrease in the interest rate of New York and rates would be equalized.
The increase in demand leads to increase in the interest rate of New York and rates would be equalized.
The businesses might take into consideration of the cheapest available mortgages.
The center which provides the money at the lowest possible cost should be preferred by the large business firms and the interest rates will be equalized and small firms will be able to get the loan at the lowest cost.

Conclusion

Hence, to invest money the higher interest rate should be preferred and to borrow the money lower interest rate should be preferred and these interest rates has an effect from the demand and supply of product.

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Answer 4

Question

Chapter 6, Problem 1Q

Summary Introduction

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Expert Solution & Answer

Answer to Problem 1Q

Yes, the difference of the residential mortgage rates of two different cities can be persisted.
There are certain forces like demand and supply that can lead to the rates to be equal.
No, the cost of money borrows for the business purpose doesn’t lead to the same risk as the money should be borrowed from the place which charges the less interest.
The large firms of the NY and C will prefer to take loan which has the less cost of money.
To borrow the money the less interest rate is better and to invest the money high interest rate is better.

Explanation of Solution

The differences of the interest rates totally depend upon the demand or supply of the financial product that prevail in the market.
The increase in supply leads to decrease in the interest rate of New York and rates would be equalized.
The increase in demand leads to increase in the interest rate of New York and rates would be equalized.
The businesses might take into consideration of the cheapest available mortgages.
The center which provides the money at the lowest possible cost should be preferred by the large business firms and the interest rates will be equalized and small firms will be able to get the loan at the lowest cost.

Conclusion

Hence, to invest money the higher interest rate should be preferred and to borrow the money lower interest rate should be preferred and these interest rates has an effect from the demand and supply of product.

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Answer 5

Chapter 6, Problem 1Q

Summary Introduction

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Expert Solution & Answer

Answer to Problem 1Q

Yes, the difference of the residential mortgage rates of two different cities can be persisted.
There are certain forces like demand and supply that can lead to the rates to be equal.
No, the cost of money borrows for the business purpose doesn’t lead to the same risk as the money should be borrowed from the place which charges the less interest.
The large firms of the NY and C will prefer to take loan which has the less cost of money.
To borrow the money the less interest rate is better and to invest the money high interest rate is better.

Explanation of Solution

The differences of the interest rates totally depend upon the demand or supply of the financial product that prevail in the market.
The increase in supply leads to decrease in the interest rate of New York and rates would be equalized.
The increase in demand leads to increase in the interest rate of New York and rates would be equalized.
The businesses might take into consideration of the cheapest available mortgages.
The center which provides the money at the lowest possible cost should be preferred by the large business firms and the interest rates will be equalized and small firms will be able to get the loan at the lowest cost.

Conclusion

Hence, to invest money the higher interest rate should be preferred and to borrow the money lower interest rate should be preferred and these interest rates has an effect from the demand and supply of product.

Answer 6

Chapter 6, Problem 1Q

Summary Introduction

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Expert Solution & Answer

Answer to Problem 1Q

Yes, the difference of the residential mortgage rates of two different cities can be persisted.
There are certain forces like demand and supply that can lead to the rates to be equal.
No, the cost of money borrows for the business purpose doesn’t lead to the same risk as the money should be borrowed from the place which charges the less interest.
The large firms of the NY and C will prefer to take loan which has the less cost of money.
To borrow the money the less interest rate is better and to invest the money high interest rate is better.

Explanation of Solution

The differences of the interest rates totally depend upon the demand or supply of the financial product that prevail in the market.
The increase in supply leads to decrease in the interest rate of New York and rates would be equalized.
The increase in demand leads to increase in the interest rate of New York and rates would be equalized.
The businesses might take into consideration of the cheapest available mortgages.
The center which provides the money at the lowest possible cost should be preferred by the large business firms and the interest rates will be equalized and small firms will be able to get the loan at the lowest cost.

Conclusion

Hence, to invest money the higher interest rate should be preferred and to borrow the money lower interest rate should be preferred and these interest rates has an effect from the demand and supply of product.

Answer 7

Chapter 6, Problem 1Q

Summary Introduction

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Answer 8

Expert Solution & Answer

Answer to Problem 1Q

Yes, the difference of the residential mortgage rates of two different cities can be persisted.
There are certain forces like demand and supply that can lead to the rates to be equal.
No, the cost of money borrows for the business purpose doesn’t lead to the same risk as the money should be borrowed from the place which charges the less interest.
The large firms of the NY and C will prefer to take loan which has the less cost of money.
To borrow the money the less interest rate is better and to invest the money high interest rate is better.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The differences of the interest rates totally depend upon the demand or supply of the financial product that prevail in the market.
The increase in supply leads to decrease in the interest rate of New York and rates would be equalized.
The increase in demand leads to increase in the interest rate of New York and rates would be equalized.
The businesses might take into consideration of the cheapest available mortgages.
The center which provides the money at the lowest possible cost should be preferred by the large business firms and the interest rates will be equalized and small firms will be able to get the loan at the lowest cost.

Answer 12

Conclusion

Hence, to invest money the higher interest rate should be preferred and to borrow the money lower interest rate should be preferred and these interest rates has an effect from the demand and supply of product.

Answer 13

Ch. 6 - Prob. 1Q Ch. 6 - Prob. 2Q Ch. 6 - Suppose you believe that the economy is just...Ch. 6 - Prob. 4Q Ch. 6 - Suppose a new process was developed that could be...Ch. 6 - Prob. 6Q Ch. 6 - Prob. 7Q Ch. 6 - Suppose interest rates on Treasury bonds rose from...Ch. 6 - Prob. 9Q Ch. 6 - Suppose you have noticed that the slope of the...

The comparison between the interest rates available at different places. Introduction: Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

To identify: The comparison between the interest rates available at different places. Introduction: Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.

Answer to Problem 1Q

Explanation of Solution

Want to see more full solutions like this?

Chapter 6 Solutions

To identify: The comparison between the interest rates available at different places.

Introduction:

Interest Rate: A rate at which a borrower is ready to pay and depositor is ready to receive the money is known as interest rate.