What is the rule of 72? Well… here’s the equation: Years to double = 72 / Interest rate DO NOT reread this equation. The rule of 72 is a hard rule to explain. I will do my best to try to explain it. The answer to ‘rule of 72’ gives us a number of years. This number of years tells us how long it takes to double our money. Let’s say you have 100 dollar. The ‘rule of 72’ helps us figure out how long it will take to have 200 dollars. Scenario 1: You have invested your 100 dollars in a 3%
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acceptabl(e) The treasurer is of the view that interest rate will rise before the company will issue the debt‚ hence will increase the cost of debt. So to hedge the interest rate risk the treasurer decided to hedge the risk using September Eurodollar futures contract. September 90-day Eurodollar futures contracts are currently trading at 96.25. You are required to a. Explain how treasurer can hedge the risk through Eurodollar futures contract? How many futures contracts are required to hedge?
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macroeconomic analyses in the past‚ the housing market has become important and strategic to policy makers in recent times due to its impact on output fluctuations and inflation. Generally‚ activities in the housing industry may affect the well being of a people in terms of size and composition of household wealth‚ accessibility to credit‚ labour productivity‚ employment and other macroeconomic variables. When house prices rise‚ the expectation of further appreciation
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HOW INTEREST RATES AFFECT OUR PURCHASING DECISIONS Fluctuating interest rates have a decidedly large impact on purchasing decisions. Higher interest rates mean that consumers don’t have as much disposable income and must cut back on spending. When higher interest rates are coupled with increased lending‚ banks makes fewer loans. Lower interest rates make it easier for farmers and manufacturers to borrow to invest in equipment and buildings. That gives business more incentive to invest
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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
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the student needs to adjust to the new curriculum and the teachers needs to study the new way of teaching the new curriculum of the new education program. Teachers plays a big part so that the student will learn and develop their skills and talent. In the new education system‚ the wa how teachers teach the students will have a change. Having k12 system as a new basic education in Philippines‚ is the teachers follows the method of this new system? Are these teachers adjust already in the new method
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Glossary: 1) Interest rates: An interest rate is the rate at which interest is paid by borrowers to use the money they borrow from a lender. The annualized cost of credit or debt calculated as the percentage ratio of interest to the client. Each bank can determine its own interest rate on loans‚ but in practice local rates are about the same from bank to bank. In general‚ interest rates rise in periods of inflation‚ higher demand for credit‚ narrow money‚ or because of higher reserve requirements
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tax time. So dividend income is treated the same way‚ and is taxed at the same rate‚ as income from working. If the Bush plan becomes law‚ dividend income will no longer be added to an investor’s total income. As a result the dividends become exempt from taxation. The exact details of the plan are not currently known‚ because it has not been debated or passed by Congress yet. As well‚ there is some uncertainty as to how the government will define "dividend" and what exemptions‚ rules‚ and loopholes
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1. How large should the discount (X) be to make this an attractive deal for Rabobank? 2. How large must the annual fee (F) be to make this an attractive deal for Morgan Guaranty? 3. How small must the combination of F and X be to make this an attractive deal for B.F. Goodrich? 4. Is this an attractive deal for the savings banks? 5. Is this a deal where everyone wins? If not‚ who loses? Introduction: Players: Morgan Bank‚ Rabobank‚ and B.F. Goodrich‚ Salomon Brothers‚ Thrift Institutions
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Impact of interest rate on Market Interest rate is one of the most prominent macroeconomic factors among many other macroeconomic factors. It has direct impact not only on our market but also on other macro economic factors like inflation‚ money supply and investment. Government uses this powerful tool to control money supply‚ inflation‚ recession‚ employment and also investment pattern. Over all‚ we can say that through interest rate government controls the economic phases of a country. Now in
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