Write the equation for present value. How are prices and interest rates related? Refer to your equation when answering the first part of this question
Give an example of a real-world situation in which knowing the relationship between prices and interest rates would be valuable.
What will be an ideal response?
Answer: From the present value equation, PV = FV × , the student should understand that prices (i.e., present values) are inversely related to interest rates. An increase in one leads to a decrease in the other if we hold the other inputs constant. We see this in many places in the economy such as the negative impact on stock and bond prices when interest rates rise or are expected to rise.
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Indicate whether the statement is true or false
The sentence "The marketing research was conducted by Judith" uses active voice
Indicate whether the statement is true or false
Answer the following statements true (T) or false (F)
Predicting changes in future economic conditions should be a major consideration in the recognition of future events.
The major difference between the descriptions of goods in a basic stock list and in a model stock plan is the _____
a. size distribution b. amount of goods purchased c. extent to which descriptions change period to period d. seasonality inherent in a basic stock list