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Are short-term interest rates more volatile than long-term interest rates?
Wiki User
∙ 11y ago
Generally, yes. But on occassions, the short term rate becomes "sticky" and the longer term rates become more volatile.
In addition, volatility is usually measured as a relativity to the rate itself. So when rates are low they "appear" more volatile. As an example, if rates are 0.10$, then a move to 0.11% is a 10% move, while the same absolute move (0.01%) when rates are 10% is only at 0.1% move.
Wiki User
∙ 11y ago
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Predict what will happen to interest rates if prices in the bond market become more volatile?
Predict what
Is the price at which bonds sell determined by the interaction of stated rates of interest and market rates of interest?
Yes, the price at which bonds sell are determined by the interaction of stated rates of interest and market rates of interest.
Do interest rates rise when inflation declines?
Interest rates are simply the price of money. When inflation declines, interest rates typically decline also.
How do interest rates affect corporate bond value?
When interest rates rise, bonds lose value; when interest rates fall, bonds become more attractive.
What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
Predict what will happen to interest rates if prices in the bond market become more volatile?
Predict what
What are the main stimuli for financial innovation?
Deregulation, improved technology, growing competition, and volatile exchange and interest rates are the main stimulus for financial innovation.
When we talk of interest rates are these the borrowing rates or the lending rates?
When we talk of interest rates , we are talking of the interest rate on the total amount of money borrowed by a person.
Is prime rates the same as interest rates?
Prime rates are the interest rates most banks charge their customers for loans while interest rates are the rates charged to borrow money and come in many forms.
Is the price at which bonds sell determined by the interaction of stated rates of interest and market rates of interest?
Yes, the price at which bonds sell are determined by the interaction of stated rates of interest and market rates of interest.
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.
Do interest rates rise when inflation declines?
Interest rates are simply the price of money. When inflation declines, interest rates typically decline also.
What is the benefit of fixed deposit interest rates?
Fixed deposit interest rates is a guaranteed interest rate for the entire term of an investment. They allow for the customer to earn high interest rates.
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.
How do interest rates affect corporate bond value?
When interest rates rise, bonds lose value; when interest rates fall, bonds become more attractive.
What is the relationship between demand for money and interest rates?
as interest rates increase, demand for money increases.
Are CD interest rates generally higher than simple savings interest rates?
true
