Investments

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sell the bond in a secondary market in order to have access to their money again. A bond can be a municipal, a treasury, a junk, a corporate or an I-bond. There are also bonds considered convertible bonds that can be transferred into stock by the bondholder. "Bonds are an important part of the economy and contribute to two-thirds of the average daily trade in U.S. market (Chakrvarty)". Bonds are considered valuable because they are a means to wealth from an investor's standpoint and they make business operations more accommodative for corporations. This is a direct route to gaining capital when it is needed.

2. Evaluate all the factors that affect interest rates to determine the one that appears to impact interest rates the most in today's economic climate. Support your answer with evidence and examples.

There are several factors in our economic environment that can affect interest rates. The first issue is economic growth. In our textbook it states that, "Changes in economic ...

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the institution that increases and decreases the money supply by selling and purchasing securities. They also influence the amount of deposits retained within commercial banks and other depository institutions. Using a stimulating monetary police, the Federal Reserve increases the money supply as well as the supply of loanable funds through the purchase of various securities. This type of monetary policy places downwards pressure on interest rates. The Fed may also enact fiscal policies that produce more government expenditures than tax revenues which causes an increase in the budget deficit. An increase in deficits produces an increase in the quantity of loanable funds demanded and an ...

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