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What is nominal interest rate minus the expected rate of inflation?
Wiki User
∙ 14y ago
The expected real interest rate.
Wiki User
∙ 14y ago
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Suppose a borrower and lender agree on the nominal interest rate to be paid on a loan and the inflation turns out to be higher than they expected Is the real interest rate on this loan higher?
the real interest rate equals nominal interest rate minus inflation rate. In the situation the inflation rate increase and the nominal interest rate remains unchanged, therefore the real interest rate must decrease.
Does real cost of hedging payable with forward contract equal to nominal cost of hedging minus nominal cost of not hedging?
yes
Gross domestic product is a measure of the?
It's the total economic output of a country. In layman's terms: how much money (as a measure for value of production, adjusted or not for inflation, the first being called "Real GDP" and the second "Nominal GDP") did the country produce in a year, plus exports, minus imports.
Why the inflation rate is calculated?
Inflation is measured by calculating the percentage rate of change of price index, which is calledthe inflation rate. The rate of inflation is usually expressed in annualised term, though the measurment periods are usually different from one year. Inflation rate= p - P /P *100 i.e, p minus P divided by P into100. Where, p= current average price level, P= price level a year ago.
How government control inflation?
As Inflation is defined as too many goods chasing too few goods, they can either raise interest rate in order to reduce consumption and make people save or reduce the money supply by selling out assets and then burn off the money they get away(to reduce the total money in the economy).
Suppose a borrower and lender agree on the nominal interest rate to be paid on a loan and the inflation turns out to be higher than they expected Is the real interest rate on this loan higher?
the real interest rate equals nominal interest rate minus inflation rate. In the situation the inflation rate increase and the nominal interest rate remains unchanged, therefore the real interest rate must decrease.
What is the rate of Risk-Free interest?
Risk-free interest is the rate of interest which exists when the expected risk of the economic transaction is zero. In most cases, the general interest rates in major banks of a country reflects the nominal interest rate, which is risk free. The real interest rate is simply the nominal interest rate minus the rate of inflation.
Does real cost of hedging payable with forward contract equal to nominal cost of hedging minus nominal cost of not hedging?
yes
Gross domestic product is a measure of the?
It's the total economic output of a country. In layman's terms: how much money (as a measure for value of production, adjusted or not for inflation, the first being called "Real GDP" and the second "Nominal GDP") did the country produce in a year, plus exports, minus imports.
Real GDP?
a measurement of economic output minus the effects of inflation or deflation, gives a more realistic assessment of growth
Mortality minus interest plus expenses equals?
Net Premium
Farmoula of rate of inflation?
Inflation rate= p - P /P *100 i.e, p minus P divided by P into100. Where, p= current average price level, P= price level a year ago. Inflation rate=((p - P) /P) *100 i.e, p minus P divided by P into100. Where, p= current average price level, P= price level a year ago.
What is primary deficit in a budget?
Primary deficit=Fiscal deficit-[minus] Interest payments
What if you only get 118 volts on a 120 outlet?
There is no problem with that voltage. As long as the voltage is plus or minus 5% of the nominal voltage of 115 volts it is considered to be in the 120 volt range.
What return can you expect on a 1 million dollar investment?
In investments and finance there is no guarantee of a positive return on any investment. Even in a low risk certificate of deposit, for example, the interest maybe be several points at most. Even here the return is not guaranteed as the FDIC will only insure up to 250,000 per account. If the bank was to became insolvent, it would represent a 75 percent loss, minus any interest accrued. Lastly, the effects of inflation will further devalue any gains made by interest on the initial capital.
Gross profit margin define?
EBITDA Earnings Before Interest Tax Depreciation and Amoortisation Also Revenue minus costs.
Why voltage is coming 230v if you measure in between phase and neutralin 415 v 3ph 4wire system?
240V is, of course, the phase voltage for three-phase, four-wire, system having a line voltage of 415 V. But these values are 'nominal' voltages, not actual voltages. Actual voltages are allowed to vary above and below the nominal voltage, as specified in the relevant government legislation. Assuming an allowed variation of plus or minus 6%, that means the line-to-neutral voltage could be as low as 225.6 V. So, it would be perfectly normal for you to measure an actual voltage of 230 V, line to neutral, for a system rated at 415/240 V. For many years, the nominal voltage, and allowable variation in the UK was 415/240 V (plus or minus 6%). However, in order to comply with EU 'harmonisation' rules, the nominal voltage is now 400/230 V (plus 10%/minus 6%) -the change in permitted variation allowed the UK to use a new nominal voltage without going to the trouble of actually changing anything -in other words, the UK system remains unchanged, at 415/240 V, but the 'official nominal' value is now 400/230 V, and the difference is catered for by changing the allowable variation!
