Hy would a borrower be willing to pay and a lender demand, Financial Management

Assignment Help:

Would there be positive interest rates on bonds in a world with absolutely no risk no default risk, maturity risk, and so on? Why would a, borrower be willing to pay and a lender demand, a positive interest rate in such a no-risk world?

Yes, there probable a positive rate of interest in a risk-free world.  This is for the reason that regardless of risk, lenders of money ought to postpone spending during the time the money is loaned. Lenders, after that, lose the opportunity to spend their money for that period of time. To compensate for the cost of losing investment opportunities while they postpone their spending, borrowers pay and lenders demand a basic rate of return that the real rate of interest.

 

 

 


Related Discussions:- Hy would a borrower be willing to pay and a lender demand

Defien contractual savings institutions, Contractual savings institutions ...

Contractual savings institutions Contractual savings institutions obtain funds at periodic intervals on a contractual basis. The industry is classified into two main groups ins

Explain significance of international financial management, Why is it impor...

Why is it important to study international financial management? Answer:  We are now living in a world in which all the main economic functions, that are production, consumption,

Csae lets.., how would you judge the potential

how would you judge the potential

How financial system works, Question: Part A  The financial syste...

Question: Part A  The financial system is complex in structure and function throughout the world. There are many different types of institutions: banks, insurance compani

Use npv method to show your calculations, Xcell engineering is planning to ...

Xcell engineering is planning to construct a futsal stadium which has 5 courts to be rented out at any point of time. Its initial cost of investment is RM$280,000. It is expected t

Modern approach, Meaning merits nd demerits of modern approch of financial ...

Meaning merits nd demerits of modern approch of financial management

Residual method to find cyclical variation, Residual Method We know th...

Residual Method We know that a time series consisting of annual data for longer periods is depicted by trend lines. This facilitates us to isolate the component of secular tre

Explain the term- trade receivable days, Explain the term- Trade receivable...

Explain the term- Trade receivable days (turnover) [Yearend trade receivables/Credit sales (or turnover)] x   365days It is the average length of time taken by customers t

Explain the concept of newsworthiness in the field of pr, Question 1: (...

Question 1: (a). A big multinational company wishes to employ a PR manager for all its PR activities. What according to you would be the advantages and disadvantages of having

NPV calc, Capital cost of product a is ? 5 crores and initial capital cost ...

Capital cost of product a is ? 5 crores and initial capital cost of product b is ? 3 crores. Life of product a is 30 years and life of product b is 10 years . The difference in ini

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd