Value at Risk: an application to the measurement of the interest rate risk exposure of Jamaican Banks to Government of Jamaica (GOJ) Bonds Mark Tracey1 Financial Stability Department Research & Economic Programming Division Bank of Jamaica Abstract This paper develops an effective value at risk (VaR) methodology to complement existing Bank of Jamaica financial stability assessment tools. This methodology employs principal component analysis and key rate durations for assessing interest rate
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CNH: Onshore deregulation‚ offshore expansion September 30‚ 2013 Interest rate strategy CNH: Onshore deregulation‚ offshore expansion DBS Group Research 30 September 2013 The Shanghai Free Trade Zone (SFTZ) opened on 29 Sep. According to the blueprint‚ financial innovations including RMB convertibility and interest rate liberalization are the priorities on the reform agenda (see “Shanghai Free Trade Zone & the reinvigoration of China”‚ 26 Sep 2013). These reforms will make the
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edu/~irelandp/ec261.html Chapter 5: The Behavior of Interest Rates 1. Loanable Funds Framework Demand Curve Supply Curve Market Equilibrium 2. Changes in Equilibrium Interest Rates Shifts in Demand Shifts in Supply Example: Interest Rates and the Business Cycle By studying Mishkin’s Chapter 4‚ we learned how interest rates could be measured for a wide variety of credit market instruments. But what economic factors serve to determine these interest rates in the first place? To answer this question‚ we
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“Interest Free Banking” is a fundamental concept derived from the Islamic form of banking. It operates with the primitive professional and ethical standards that exclude the “Muslims” from paying or receiving any kind of interest. This certainly does not mean that the revenue generating activities or money raving businesses are not encouraged. All of these business forms are greatly appreciated as far as they do not involve interest in any kind. There are a lot of financial tools introduced by the
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Extended Response – Economics: TOPIC: Interest Rates and The RBA Question: Analyze the factors that influence the level of interest rates and the role of the Reserve Bank of Australia in determining the cash rate: In economics there are numerous amounts of factors that influence the levels of interest rates in the economy. Overall there are six major factors that influence the levels of the rates; these include the state of the economy‚ inflation‚ the Reserve Bank of Australia (RBA) movements
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Understanding Interest Rates 4.1 Measuring Interest Rates 1) The concept of ________ is based on the common-sense notion that a dollar paid to you in the future is less valuable to you than a dollar today. A) present value B) future value C) interest D) deflation Answer: A 2) The present value of an expected future payment ________ as the interest rate increases. A) falls B) rises C) is constant D) is unaffected Answer: A 3) An increase in the time to the promised future
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Article: Interest Rate Hikes in Brazil http://online.wsj.com/news/articles/SB10001424052702303626804579505673346899690 http://www.reuters.com/article/2014/04/02/brazil-economy-rates-idUSL1N0MU0O420140402 As the global recession still lingers‚ countries have been looking for different ways to stimulate the economy. There are multiple ways to stimulate the economy‚ primarily through monetary and fiscal policy‚ action taken by the central bank and government respectively‚ in order to adjust money
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Negative interest rates As a result of our current economic situation‚ the bank is contemplating lowering interest rates to a monumental level. They are suggesting we make them negative. This would mean it would cost money to save money; the intention behind this is to stimulate spending within the economy. If businesses are forced to spend more money‚ then aggregate demand shifts to the right as investment‚ one of the components of AD‚ has been increased. Although‚ the interest rate isn’t simply
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LABUAN SCHOOL OF INTERNATIONAL BUSINESS AND FINANCE UNIVERSITI MALAYSIA SABAH LABUAN INTERNATIONAL CAMPUS GB30703 INTERNATIONAL MONEY AND CAPITAL MARKETS INTEREST RATE AND EXCHANGE RATE POLICIES SEMESTER 1‚ 2013/2014 PREPARED TO: MR. RICKY CHIA CHEE JIUN PREPARED BY: NO. NAME MATRIC NO. HP. NO. 1 MUHAMMAD RIDZWAN BIN ABD RAHMAN BG11110337 013-6604707 SUBMISSION DATE: 10th DECEMBER 2013 Table of Contents LIST OF ABBREVIATIONS ADF
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INFLATION RATES AND INTEREST RATES: THE FISHER EQUATION NOTES by: Chadia Mathurin Economists differentiate between real and nominal interest rates where: real interest: is defined as the increase or decrease in a consumer’s purchasing power experienced as a result of changes in the interest rate. nominal interest: is defined as the interest payed by the bank. Let: i denote the nominal interest rate r the real interest rate pi ‚ the inflation rate The equation for the real interest rate
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