tailieunhanh - Lecture Money and capital markets: Chapter 6 - Peter Rose, Milton Marquis

Chapter 6 - Measuring and calculating interest rates and financial asset prices. In this chapter you will explore the important relationships between the interest rates on bonds and other financial instruments and their market value or price; you will be introduced to the many different ways lending institutions may calculate the interest rates they charge borrowers for loans; you will be able to determine how interest rates or yields on deposits in banks, credit unions, and other depository institutions are figured. | Chapter 6 Measuring and Calculating Interest Rates and Financial Asset Prices Learning Objectives To explore the important relationships between the interest rates on bonds and other financial instruments and their market value or price. To look at the many different ways lending institutions may calculate the interest rates they charge borrowers for loans. To determine how interest rates or yields on deposits in banks, credit unions, and other depository institutions are figured. Introduction Many different interest-rate measures attached to different types of financial assets have been developed, leading to considerable confusion, especially for small borrowers and savers. In this chapter, we will examine the methods most frequently used to measure interest rates and the prices of financial assets in the money and capital markets. Units of Measurement For Interest Rates and Asset Prices The interest rate is the price that is charged to a borrower for the loan of money. Interest | Chapter 6 Measuring and Calculating Interest Rates and Financial Asset Prices Learning Objectives To explore the important relationships between the interest rates on bonds and other financial instruments and their market value or price. To look at the many different ways lending institutions may calculate the interest rates they charge borrowers for loans. To determine how interest rates or yields on deposits in banks, credit unions, and other depository institutions are figured. Introduction Many different interest-rate measures attached to different types of financial assets have been developed, leading to considerable confusion, especially for small borrowers and savers. In this chapter, we will examine the methods most frequently used to measure interest rates and the prices of financial assets in the money and capital markets. Units of Measurement For Interest Rates and Asset Prices The interest rate is the price that is charged to a borrower for the loan of money. Interest Fee required by the lender for rate on = the borrower to obtain credit 100 loanable Amount of credit made funds available to the borrower Interest rates are usually expressed as annualized percentages. However, both 360-day and 365-day years are commonly used. The compounding terms may also differ. Units of Measurement For Interest Rates and Asset Prices A basis point equals 1/100 of a percentage point. Example = 10% + 50 basis points, or 1050 basis points Units of Measurement For Interest Rates and Asset Prices The prices of common and preferred stock are measured today in many markets in terms of dollars and decimal fractions of a dollar (or some other currency unit). Example $ per share (versus $40 1/4 in the recent past) Units of Measurement For Interest Rates and Asset Prices Bond prices are usually expressed in points and fractions of a point, with each point representing $1 on a $100 basis or $10 for a $1000 bond. Example A bond priced at 97 is selling for $97 on a

• Tài chính doanh nghiệp
• Capital markets
• Lecture Money and capital markets
• Financial institutions
• Global marketplace
• Financial system
• Calculating interest rates
• Money markets
• Financial markets
• Central banks
• Monetary policy
• Stock markets
• Global economy
• Financial assets
• Financial transactions
• Financial information marketplace
• Financial forces
• 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