Business activity cycle, Finance Basics

Business Activity Cycle

The interest rates also depend on business cycles as above. Because the economy moves in the four (4) business cycles, such interest rates will shift like within economic recessions, short-term interest rates experience sharp decline than L.T interest rates. This is just because of the following reasons:

490_Business activity cycle.png

i. The CBK operates mainly in the S.T Sector (market) and its intervention has a major effect on S.T interest rates.

ii. L.T interest rates usually reflect the average supposed inflation rate over the next 10 - 20 years.

These expectations do not change usually because L.T interest rates are fixed because of debt covenants entered into throughout borrowing time.

Posted Date: 1/30/2013 3:10:48 AM | Location : United States

Related Discussions:- Business activity cycle, Assignment Help, Ask Question on Business activity cycle, Get Answer, Expert's Help, Business activity cycle Discussions

Write discussion on Business activity cycle
Your posts are moderated
Related Questions
Factors of Capital Structure 1. Availability of securities - This influences the company's employ of debt finance that means such if a company has enough securities, so then

After read all the available information carefully, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C=100+0.50Y

Inventories turnover 8 times 4 times Receivable days 63 days 40 days

2.Calculating Project NPV-The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporation tax rate i

Merchant Banks - Banking Institution Merchant Banks begun life as merchants and begun to control in financial firms, during the 19 th Century . The merchant banks act like a

Example of Accounting Rate of Return Method                                    Shs. Project X cost              500,000 Scrap value                 100,000 Stream of

explain the financial planning process in a private limited company

Valuation of Bonds and Debentures It will depend on expected cash flows consisting of annual interest in additional the principal amount to be obtained at maturity.  The suita

Before purchasing insurance we have to go through different factors. Among different important factors there are two most crucial aspects we should consider before buying insurance

Explain the Giving Margin Money to Broker Marin  is  the  amount  of  money  which is provided  by customer to the brokers who have agreed to trade their securities. It may