Discounted Rate of Return
Taking into account the time value of money, the discount rate describes the interest percentage that an investment may yield over its lifetime . For example, an investor expects a $1,000 investment to produce a 10% return in a year.
Which best describes the discount rate?
Discounted Rate of Return
Taking into account the time value of money, the discount rate describes the interest percentage that an investment may yield over its lifetime . For example, an investor expects a $1,000 investment to produce a 10% return in a year.
What is the discount rate quizlet?
discount rate. the interest rate that the Federal Reserve Banks charge on the loans they make to commercial banks and thrift institutions. Federal funds rate. the interest rate banks and other depository institutions charge one another on overnight loans made out of their excess reserves.
Which accurately describes a money market account?
A money market account is an interest-bearing account at a bank or credit union —not to be confused with a money market mutual fund. ... Most money market accounts pay a higher interest rate than regular passbook savings accounts and often include checkwriting and debit card privileges.
Which of the following best describes a mutual savings bank quizlet?
Which of the following best defines a mutual savings bank? A financial institution whose depositors are owners sharing in its profits.
What is an example of discount rate?
In this context of DCF analysis, the discount rate refers to the interest rate used to determine the present value . For example, $100 invested today in a savings scheme that offers a 10% interest rate will grow to $110.
What is today's discount rate?
| This week Month ago | Federal Discount Rate 0.25 0.25 |
|---|
How does the discount rate work quizlet?
When banks are running low on reserves, they may borrow reserves from the Fed. The discount rate refers to the interest rate on loans the Fed makes to banks .
What is the prime rate quizlet?
Prime Rate is the prime interest rate, or prime lending rate, is largely determined by the federal funds rate, which is the overnight rate which banks lend to one another. An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and nominal interest rates.
What is the Federal Reserve's discount rate quizlet?
Discount rate is the Federal Reserve charges for loans to commercial banks . Explain the relationship between the money supply and interest rates. The higher the interest rate, the more it costs to borrow money and less money will be used.
Which answer best describes the term money market?
Something of economic value. Which answer best describes the term money market: A market for trading short-term debt instruments , such as treasury bills, commercial paper, bankers' acceptances, and certificates of deposit. The greatest value of credit cards to merchants is: The issuing bank commits to payment.
What is the downside of a money market account?
A money market account is a poor vehicle for many people to save for long-term goals. Because it doesn't have a set term and allows access to your money, it doesn't reinforce your will power. This is a disadvantage if you are subject to impulse purchases .
Can I lose money in a money market account?
Money market accounts are sometimes called money market deposit accounts or money market savings accounts. ... Money market funds are not insured by the FDIC or the NCUA, which means you could possibly lose money investing in a money market fund.
Which best describes the purposes of savings and checking accounts?
A checking account lets you easily access your money for daily transactions; a savings account is meant to help grow your money over time .
Which best describes the federal funds rate?
The fed funds rate is the interest rate that depository institutions—banks, savings and loans, and credit unions—charge each other for overnight loans . The discount rate is the interest rate that Federal Reserve Banks charge when they make collateralized loans—usually overnight—to depository institutions.
Which of the following is the best definition of globalization quizlet?
globalization doesn't have a specific definition, but basically it is: The worldwide movement towards economic, financial, trade and community integration , as well as social cultural and political. Economic globalisation refers to the integration of markets in the global economy.
