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Which type of investor would be most likely to purchase zero coupon bonds?
(4) risk-averse investors anticipating increases in interest rates
Does a higher down payment result in a lower interest rate?
In general, a higher down payment can result in a lower interest rate on a loan. This is because a larger down payment reduces the lender's risk, making them more likely to offer a lower interest rate.
What would most likely lead to a higher level of interest rates in the economy?
the level of inflation begins to decline
How individual investors likely to be affected by institutional investors?
Individual investors may have to pay more for stocks because institutional investors are bidding the prices up. This can make it hard for individual investors to have a sizable portfolio.
What effect will a decrease in interest rates below the face interest rate and before a bond is issued have on the cash received from the bond issue?
If interest rates decrease below the bond's face interest rate before the bond is issued, the bond will likely be issued at a premium. This means that investors will pay more than the face value of the bond to receive higher interest payments compared to current market rates. Consequently, the cash received from the bond issue will be greater than the face value, increasing the total funds raised by the issuer.
Why do corporations with lower credit ratings offer higher coupons or interest rates on their bonds?
Corporations with lower credit ratings are perceived as higher risk by investors, as they are more likely to default on their debt obligations. To compensate for this increased risk, these corporations must offer higher coupons or interest rates on their bonds to attract investors. This higher yield serves as an incentive for investors to take on the added risk associated with lending to less creditworthy entities. Ultimately, the higher interest rates reflect the need to balance the risk-reward equation for investors.
Which type of investor would be most likely to purchase zero coupon bonds?
(4) risk-averse investors anticipating increases in interest rates
To earn a higher interest rate what trade off will you likely have to make?
A money market account is an account that earns a higher rate of interest when you carry a larger balance, resulting from large deposits.
Does a higher down payment result in a lower interest rate?
In general, a higher down payment can result in a lower interest rate on a loan. This is because a larger down payment reduces the lender's risk, making them more likely to offer a lower interest rate.
What would most likely lead to a higher level of interest rates in the economy?
the level of inflation begins to decline
How individual investors likely to be affected by institutional investors?
Individual investors may have to pay more for stocks because institutional investors are bidding the prices up. This can make it hard for individual investors to have a sizable portfolio.
What describes the most likely effect of the sale of a new batch if Treasury bonds?
The sale of a new batch of Treasury bonds typically leads to an increase in the supply of bonds in the market, which can result in a rise in bond yields as investors demand higher returns for the increased supply. This, in turn, may lead to higher interest rates in the broader economy, as Treasury yields often serve as a benchmark for other borrowing costs. Additionally, if investors perceive the sale as a sign of increased government borrowing, it might impact their confidence in fiscal policy.
What are potential investors?
people likely to invest in a business
What effect will a decrease in interest rates below the face interest rate and before a bond is issued have on the cash received from the bond issue?
If interest rates decrease below the bond's face interest rate before the bond is issued, the bond will likely be issued at a premium. This means that investors will pay more than the face value of the bond to receive higher interest payments compared to current market rates. Consequently, the cash received from the bond issue will be greater than the face value, increasing the total funds raised by the issuer.
Advertisements by the Virginia Company to promote Jamestown most likely pointed out?
oppertunities for workers and investors
The return that investors feel is most likely to occu based on current available information?
The expected return is the return investors feel most likely to occur based on currently available information.
Currency Options?
Foreign ExchangeInvestors who wish to own foreign currencies directly can open an account with a foreign exchange broker. Currencies are bought and sold constantly. An investor can likely find a buyer or a seller for any currency pair he wishes to trade. The most popular trade in foreign exchange is the carry trade. The investor purchases a pair consisting of currencies with high and low interest rates. By purchasing a pair where he sells the low-rate currency and buys the high-rate currency, he can take advantage of the rate difference and make a tidy profit. Foreign exchange is the easiest way to buy foreign currencies directly with no hassle. Foreign exchange is risky and requires the constant monitoring of exchange rates and their influences.Currency-Based ETFsAn exchange-traded fund (ETF) is like a mutual fund that trades on an exchange as a security. Currency-based ETFs can help investors take advantage of currency fluctuations or hedge against their own currency movements. Multiple ETFs that track foreign currencies exist, like the popular CurrencyShares series, which track everything from the euro to the Canadian dollar. CurrencyShares ETFs buy and hold foreign currencies directly instead of using futures contracts or swaps, which make them slightly less risky. Investors in these ETFs make money if the foreign currency strengthens, and lose money if the currency weakens. Currency-based ETFs are convenient and liquid, enabling investors to quickly open and close positions, if necessary.Foreign Bank AccountsInvestors can also go the old-fashioned route and simply open a bank account in a foreign country. Alternatively, they can open an account with a domestic branch of a foreign bank. Holding physical foreign currency satisfies investors who are concerned with civil or social unrest. Another option is to purchase a certificate of deposit (CD) denominated in a foreign currency.EverBank, an online bank, currently offers WorldCurrency CDs for single currencies and baskets of currencies. Investors make money from the interest rate the CD pays as well as from currency appreciation. Physical currency is the oldest form of investing in foreign currencies. Today, it serves investors who practice it well. Currencies are the grease that oil the global economic machine.
