INTRATEDETERMINANTSCLASS

INTRATEDETERMINANTSCLASS - Interest Rates Key Points...

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1 1 Interest Rates s Key Points b determinant of THE (overall) interest rate s interest rate trends s The real rate b explanation of differences in interest rates s term structure and yield curves s risk structure s risk and tax considerations b Stock Valuation s Discounted dividends/Gordon model s Efficient Markets Hypothesis and Random walks 2 In the News? 4% INCREASE 19.6% 2007 TO 23.8% 2010 3 Course Issues b Final Exam Conflicts – what is it? s see me after class or office hours with documentation starting 12/1 s Makeups only if documented conflict in advance b Graduating Seniors? b b Grade book problems-check NOW! b Grading explanation b Extra Credit b Last Class Tues 12/13 b Final Exam Friday 12/23 8-11am MI100 A 850 B+ 800 B 780 C+ 740 C 670 D 600 F < Total Points Approximate Curve
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2 4 Explaining ‘the’ Interest Rate s S & D for Money – Liquidity Preference b Md&Ms determine ‘the’ nominal interest rate level s b -> Pb Pb up->i down b i=C/Pb Pb up I down s b Broader view –all funds b 5 Interest Rates Since the Early 1980’s s Fisher effect s lower expected inflation increased demand and reduced supply of bonds P ↑→ r And to the present 6
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3 7 Does increasing the money supply lower interest rates? s
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This note was uploaded on 02/29/2012 for the course ECONOMICS 220:301 taught by Professor Sheflin during the Fall '09 term at Rutgers.

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INTRATEDETERMINANTSCLASS - Interest Rates Key Points...

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