(1) The prime rate, and other interest rates, offered by banks often change in the same direction...
Question:
(2) As one of several advisors to the U.S. Secretary of the Treasury, you have been asked to submit a memo in connection with the average maturity of the obligations of the federal government. The basic premise is that the average maturity is far too short. As a result, issues of debt are coming due with great frequency and needing constant reissue. On the other hand, the economy is presently showing signs of weakness. It is considered unwise to issue long-term obligations and absorb investment funds that might otherwise be invested in employment-producing construction and other private sector support. Based on these conditions, what do you recommend as a course of action to the U.S. Secretary of the Treasury?
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Introduction to Finance Markets Investments and Financial Management
ISBN: 978-1118492673
15th edition
Authors: Melicher Ronald, Norton Edgar
Question Posted: