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  • Mon Fin Sys New Sheet 4

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    Omar Gibson
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    The document is a tutorial sheet for a course on monetary and financial systems analyses that covers interest rates. It lists 15 questions about interest rate definitions, determinations, and factors that influence rates. Some of the key topics covered include the difference between nominal and real interest rates, theories of interest rate determination, reasons nominal rates are positive, how the yield curve works, why different rates exist for different loans, and how economic conditions can affect a country's relative interest rates.

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    The document is a tutorial sheet for a course on monetary and financial systems analyses that covers interest rates. It lists 15 questions about interest rate definitions, determinations, and factors that influence rates. Some of the key topics covered include the difference between nominal and real interest rates, theories of interest rate determination, reasons nominal rates are positive, how the yield curve works, why different rates exist for different loans, and how economic conditions can affect a country's relative interest rates.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    12 views1 page

    Mon Fin Sys New Sheet 4

    Uploaded by

    Omar Gibson
    The document is a tutorial sheet for a course on monetary and financial systems analyses that covers interest rates. It lists 15 questions about interest rate definitions, determinations, and factors that influence rates. Some of the key topics covered include the difference between nominal and real interest rates, theories of interest rate determination, reasons nominal rates are positive, how the yield curve works, why different rates exist for different loans, and how economic conditions can affect a country's relative interest rates.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    THE UNIVERSITY OF TECHNOLOGY, JAMAICA

    School of Business Administration Monetary and Financial System Analyses of Interest Rates
    Tutorial Sheet 4 1. 2. 3. 4. State the general definition of an interest rate. What is a nominal rate of interest? What is a real rate of interest? List and explain in detail the reasons for nominal interest rates normally being positive. 5. State in detail what are the two theories of interest rate determination. 6. Explain the concept of reconciliation of the two theories of two theories of determination. 7. State the causes of changes in the overall level of interest rates. 8. Explain the concept of the yield curve. 9. Why are there so many different rates of interest in a modern economy? 10. Why might each type of loan be though of as being unique? 11. In what way might the size of a loan affect the rate of interest charged? 12. Real rates of interest can only be measured approximately even when nominal rates of interest are absolutely fixed. Why? 13. How may market imperfections affect the pattern of interest rates established? 14. What factor is crucial to the level of bank base rates? 15. In what way is the general condition of a countrys economy likely to affect the level of its interest rate relative to those existing in other countries?

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