Week $3$ Homework Activity $-$ Banking Concepts $1$

Identify the core principles that could be used to explain why credit card issuers charge such high rates of interest. Refer to Chapter $1,$ section "The Five Core Principles of Money and Banking," pages $4-8.$

Explain why the following statement is true: "Money is an asset, but not all assets are money." Refer to Chapter $2,$ section "Money and How We Use It$,"$ pages $23-25.$

Identify the four fundamental characteristics that determine the value of a financial instrument. Refer to Chapter $3,$ section "Primer for Valuing Financial Instruments," pages $50-51.$

If a borrower and a lender agree on a long$-$term loan at a nominal interest rate that is fixed over the duration of the loan, explain how a higher$-$than$-$expected rate of inflation will impact the parties, if at all. Refer to Chapter $6,$ section "Inflation Risk," pages $151-152.$