Interest Rate Concepts And Calculations Flashcards
1
Q
What is the relationship shown by a yield curve?
A
It shows the relationship between time to maturity and bond interest rates
2
Q
What is real interest rate?
A
The stated (or nominal) rate of interest for a period less than rate of inflation for that period.
3
Q
What is the effective cost of the loan?
A
The annual dollar cost of the loan divided by the net useable proceeds of the loan
