Where do financial institutions obtain funds for making loans? How are the interest rates for loans determined? Are the interest rates the same for all borrowers? Why or why not?
Answer to relevant QuestionsWhat effect would a general change in current interest rates have on you as a depositor or borrower? Why is a high risk premium is an advantage for the investor? Why is a low risk premium an advantage for the investor? When making banking decisions, why should you be concerned about current interest rates? Casey has $ 1,000 to invest in a certificate of deposit. Her local bank offers her 2.5% on a 12- month FDIC- insured CD. A nonfinancial institution offers her 5.2% on a 12- month CD. What is the risk premium? What else must ...What are the three types of risk that affect money market investments?
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