When market rates of interest decrease the use of floating rate
Added by Bryan R.
Step 1
A floating rate refers to an interest rate that changes periodically based on changes in a benchmark interest rate or index. Show more…
Show all steps
Your feedback will help us improve your experience
Aparna Shakti and 70 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
as a result here is a tendency for interest rates t decline during during short-term rates decline more sharply than long-term rates because(1) the Fed operates mainly t the short-term sector, so the fed's intervention has the strongest effect(2) long-term rates reflect the average expected inflation rate over the next 20 to 30years and this expectation doesn't change much due to the level of current inflation so,short-term rates are volatile than long-term rates
Aparna S.
Relationship between bond market and interest rates
Sanchit J.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD