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C5: INTEREST RATE - Coggle Diagram
C5: INTEREST RATE
ROLES
stimulate benefits to attract surplus capital in the economy
encourage banks and businesses to operate effectively
forecast the state
regulate macroeconomics
stimulate investments for economic development
CLASSIFICATION
value
nominal
real
credit term
short term
long term
the stability
fixed
floating
method of interest payment
discount
coupon
accrual
banking activities
deposit rates
lending rates
discounting rates
rediscounting rates
refinancing rates
interbank offered rates
base rates
IMPACTS
investment
spending
net exports
inflation
TERM STRUCTURE
definition
upward slope
horizontal slope
downward slope
hump slope
theory of expectation
segmented market theory
preferred habitat theory
ESSENCE
price of credit
price of loan capital
tool to reflect the price of loan capital
CALCULATION METHODS
simple interest
compound interest
DETERMINANTS
direct
capital demand
capital supply
indirect
expected inflation rate
economic development
average return rate
fiscal policy
monetary policy
RISK STRUCTURE
definition
risk structure
risk premium
determinants
credit risk
liquidity
tax policies
DEFINITION