Lecture The economics of Money, Banking and Financial markets: Chapter 4 Understanding Interest Rates. After studying this chapter you should be able to: detail the present value concept and the meaning of the term interest rate; discern among the ways of measuring the interest rate: the yield to maturity, the current yield, and the yield on a discount basis; illustrate how bond prices and interest rates are negatively related: when interest rates rise, bond prices fall, and vice versa; |
