Nominal interest rate-the growth rate of your money. Real interest rate- the growth rate of your purchasing power. the real rate of interest is the nominal rate reduced by the loss of purchasing power resulting from inflation. the approximation rule overstates .The approximation rule is more exact for small inflation rates and is perfectly exact for continuously compounded rates. rr=rn-i ;rr=(rn-i)/1+i; conventional certificates of deposit offer a fuaranteed nominal rate of interest; Because future
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TUTORIAL 1 BUSINESS PLANNING & FINANCIAL PLANNING 1. Candidate should explain that a stockholder owns part of a company and is entitled to income in the form of dividends. Stockholders also elect directors who run the company. Stakeholders are groups of people who have an interest in how the firm is run. These include stockholders, employees, management, creditors and customers among others. Each group is interested in the firm’s operation and profitability for its own reasons. All stockholders are
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Investment Outlook from Bill Gross September 2015 Sizing Up the Global Economy Size does matter you know. There are basketball players, NFL linemen, and the more popular but unmentionable allusion to the bedroom that makes my point, although the older one gets, the more irrelevant playing basketball and football become, if you get my drift. More interesting to me than any of the above, however, is the application of size and its relevance to the animal kingdom. Randy Newman raised
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Financial Institutions, Instruments and Markets—7th edition Instructor’s Resource Manual Christopher Viney and Peter Phillips Chapter 1 A modern financial system Learning objective 1.1: explain the functions of a modern financial system • The introduction of money and the development of local markets to trade goods were the genesis of the financial system of today. • Money is a medium of exchange that facilitates transactions for goods and services. • With wealth being accumulated
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Financial markets and institution are life blood of any economy. DISCUSS. What are financial markets market An actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services, or contracts or instruments, for money or barter. Markets include mechanisms or means for (1) determining price of the traded item, (2) communicating the price information, (3) facilitating deals and transactions
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the announcement. But simply irrational bull traders may cause the price rise. Arbitrageur shorts deletions (buy additions) on announcement and holds the position until one day prior to the change date and settles it as close as possible to this day market close. Also, he can wait
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Stock Market and Stock Valuation in Ethiopia Context A capital market is a market for debt or equity securities and other financial instruments, where companies, municipalities and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on the money market. Primary market in Ethiopia has been flourished after the change of the economic assumption from socialist ideology to mixed
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economy of any country depends mostly on the establishment of sound, effective and efficient financial system in that country. A well-developed financial system plays an important role in accelerating economic growth by mobilizing savings and facilitating investment in an efficient manner (Mu, 2007). Financial market is composed of different markets- Money Market, Capital Market, Derivative Market etc. All the markets play an interactive role for the development of economy by formation of capital through
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| |Efficient market |Definition |Prices that are traded in the public financial market, which slowly release| | | |new information there is. | | |Resource you used |(Business Dictonary, 2015) | |Primary versus secondary market |Definition
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.....................................9 1.3 MARKET TYPES ....................................................................................................................9 1.3.1 Normal Market..............................................................................................................9 1.3.2 Odd Lot Market.............................................................................................................9 1.3.3 RETDEBT Market ...........................................
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