MathsGee Answers is Zero-Rated (You do not need data to access) on: Telkom | Dimension Data | Rain | MWEB
First time here? Checkout the FAQs!
MathsGee is Zero-Rated (You do not need data to access) on: Telkom |Dimension Data | Rain | MWEB

0 like 0 dislike
According to economics, how are interest rates set in the marketplace?
in Economics and Finance by Gold Status (10,247 points) | 8 views

1 Answer

0 like 0 dislike
Best answer
Economics tells us that interest rates are set in the marketplace by the forces of supply and demand, where investors are suppliers of funds and borrowers are demanders of funds.

Taking the perspective of investors in analyzing market-determined interest rates, we can view an interest rate $r$ as being composed of a real risk-free interest rate plus a set of four premiums that are required returns or compensation for bearing distinct types of risk:
$r=$ Real risk-free interest rate $+$ Inflation premium $+$ Default risk premium $+$ Liquidity premium $+$ Maturity premium
by Gold Status (10,247 points)

Related questions

0 like 0 dislike
0 answers
asked Sep 13, 2020 in Mathematics by MathsGee Diamond (74,124 points) | 22 views
0 like 0 dislike
1 answer
0 like 0 dislike
0 answers
0 like 0 dislike
0 answers
Quick search syntax
tags tag:apple
author user:martin
title title:apple
content content:apple
exclude -tag:apple
force match +apple
views views:100
score score:10
answers answers:2
is accepted isaccepted:true
is closed isclosed:true

MathsGee provides answers to subject-specific educational questions for improved outcomes.

On MathsGee Answers, you can:

1. Ask questions
2. Answer questions
3. Comment on Answers
4. Vote on Questions and Answers
5. Donate to your favourite users

MathsGee Tools

Math Worksheet Generator

Math Algebra Solver

Trigonometry Simulations

Vectors Simulations

Matrix Arithmetic Simulations

Matrix Transformations Simulations

Quadratic Equations Simulations

Probability & Statistics Simulations

PHET Simulations

Visual Statistics

ZeroEd Search Engine

Other Tools

MathsGee ZOOM | eBook