tailieunhanh - Lecture Money and capital markets: Financial institutions and instruments in a global marketplace (8th edition): Chapter 5 - Peter S. Rose

Chapter 5 - The determinants of interest rates: competing ideas. After studying this chapter you will be able to understand the important roles that interest rates play within the economy, to explore the most important ideas about what determines the level of interest rates and asset prices within the financial system; to identify the key forces that economists believe set market interest rates and asset prices into motion. | Money and Capital Markets 5 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu The Determinants of Interest Rates: Competing Ideas Learning Objectives To understand the important roles and functions that interest rates perform within the economy and the financial system. To explore the most important ideas about the determinants of interest rates and asset prices. To identify the key forces that economists believe set market interest rates and asset prices into motion. Introduction The acts of saving and lending, and borrowing and investing, are significantly influenced by and tied together by the interest rate. The interest rate is the price a borrower must pay to secure scarce loanable funds from a lender for an agreed-upon time period. Functions of the Interest Rate in the Economy The interest rate helps guarantee that current savings will flow into investment to promote . | Money and Capital Markets 5 C h a p t e r Eighth Edition Financial Institutions and Instruments in a Global Marketplace Peter S. Rose McGraw Hill / Irwin Slides by Yee-Tien (Ted) Fu The Determinants of Interest Rates: Competing Ideas Learning Objectives To understand the important roles and functions that interest rates perform within the economy and the financial system. To explore the most important ideas about the determinants of interest rates and asset prices. To identify the key forces that economists believe set market interest rates and asset prices into motion. Introduction The acts of saving and lending, and borrowing and investing, are significantly influenced by and tied together by the interest rate. The interest rate is the price a borrower must pay to secure scarce loanable funds from a lender for an agreed-upon time period. Functions of the Interest Rate in the Economy The interest rate helps guarantee that current savings will flow into investment to promote economic growth. It rations the available supply of credit, generally providing loanable funds to those investment projects with the highest return. It brings the supply of money into balance with the public’s demand for money. Functions of the Interest Rate in the Economy The interest rate serves as an important tool for government policy through its influence on the volume of savings and investment. The Classical Theory of Interest Rates The classical theory argues that the rate of interest is determined by two forces: the supply of savings, derived mainly from households, and the demand for investment capital, coming mainly from the business sector. The Classical Theory of Interest Rates Household Savings Current household savings equal the difference between current income and current consumption expenditures. Individuals prefer current over future consumption, and the payment of interest is a reward for waiting. Higher interest rates encourage the substitution of current saving for .

• Tài chính doanh nghiệp
• Capital markets
• Money markets
• Financial institutions
• Financial instruments
• Global marketplace
• Interest rates
• Financial system
• Financial markets
• Central banks
• Monetary policy
• Stock markets
• Lecture Money and capital markets
• Global economy
• Financial assets
• Financial transactions
• Financial information marketplace
• Financial forces
• Calculating interest rates
• Risk structure of interest rates
• Interest rate forecasting
• Investment risk
• Major corporations
• Federal credit agencies
• Services of the federal reserve
• Central bank monetary policy
• Commercial banking industry
• Nonbank thrift institutions
• Insurance companies
• Investment banks
• Federal reserve system
• Local governments operating
• Business borrowing
• Corporate stock
• Consumer lending
• Residential mortgage market
• International transactions
• Currency values