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Do fixed bonds have higher rates than bonds with fluctuating interest?
Fixed bonds don't necessarily have higher rates than bonds with fluctuating interest. An interesting feature of bonds is that their rates tend to go down as interest rates in general go up. A fixed rate bond will yield the same return no matter what the economy does, but a fluctuating interest bond's rate could go up if the general interest rate goes down or vice versa. So really, the important determining factor of which type of bond performs better is the economy in general.
How do financial institutions calculate interest rates?
Financial institutions base their interest rates on fluctuation of today's market. If the market is doing well then interest rates are high. If the market is down, interest rates goes down along with it.
What monetary policy should be implemented to correct an inflationary economy?
a sale of bonds to decrease the money supply, increasing interest rates, these are recessionary measures used to slow down the economy.
What monetary policy should be implemented to correct inflationary economy?
a sale of bonds to decrease the money supply, increasing interest rates, these are recessionary measures used to slow down the economy.
How beneficial are CD interest rates?
What is beneficial about CD interest rates is that they are constant for the specified period of time. Sometimes interest rates can go up or down but CD interest rates would stay the same.
How has the current housing crisis affected mortgage rate?
Mortgage rates or the interest rates for home loans are affected by a variety of factors. More often than not, they are influenced by supply and demand. A strong economy results in more borrowing which in turn results in higher interest rates. Conversely, with the softening of an economy, borrowing goes down and so does interest rates. The Federal Reserve can also influence interest rates through raising or lowering the discount rate which is the interest rate banks are charged when they borrow money from the Federal Reserve. Read more http://www.housingnewslive.com/mortgage-rates.php
Define interest rates?
Interest rates are the rate at which interest is paid by a borrower for the use of the money 'lent' from the lender. That underlying interest rates from which the overall rate is determined, is set by the central bank of that country and is a proxy for the overall state of the economy. During high growth or inflationary periods interest rates are so as to slow down the economy to a sustainable non inflationary rate, or to 'bring down' the rate of inflation. During weaker times (as in the age of austerity we are currently in) it is set at a much lower rate to encourage people to go out, borrow money and invest in ventures. The rate is expressed as a percentage of the principle for a period of one year.
When inflation becomes a problem what action will fed likely take with regard to interest rates?
when inflation becomes a problem the action the fed will RAISE INTEREST to slow the economy down a little.
James has purchased a 10-year bond that pays a 50 coupon If interest rates go up what happens?
the bond PRICE will go DOWN
How does one's economy be affected by interest rates hike or cut?
because when the interest rate goes up means there is a good economy and banks making money. when the interest rate is low banks are lossing money so they out it down to get as many people in to their bank. the consumers are also not spending as much whih is effected by retail sales.
What are the mortgage rates for a condo?
Mortgage rates for a condominium will vary depending on the overall cost of the property, the down payment that is put down, and the interest rates that will apply to the loan. Although rates can be as low as 2%, interest rates for condominiums are generally higher than for single-family homes.
Who would benefit from a fixed annuity?
Fixed annuities have a guaranteed interest rate for a set time period. So, if interest rates go up and you are locked into a rate you are the loser. But the reverse can also work, if rates are high and rates go down, the annuity has to pay you the rate for the life of the time period. So, either the person or financial group could be the loser depending upon what happens to interest rates.
