interest rate
It is usually expressed as a percentage. This topic is part of Finance within Government & Society. This page currently draws on 6 supporting questions, with answers and bonus facts available below.
interest rate trivia questions
An interest rate is the cost of borrowing what?
Answer: Money
Bonus fact: It is usually expressed as a percentage.
For a saver, interest is typically what?
Answer: Return paid on deposited or lent money
Bonus fact: Banks may pay interest on deposits.
What usually happens to the present value of a future payment when interest rates rise?
Answer: It falls
Bonus fact: Higher discount rates reduce present values.
What happens to the market price of an existing fixed-rate bond when prevailing interest rates rise, all else equal?
Answer: It tends to fall
Bonus fact: Older lower coupons become less attractive.
What tool lets a central bank influence short-term interest rates by buying or selling securities?
Answer: Open-market operations
Bonus fact: Open-market transactions affect banking-system reserves.
A central bank manages a country's monetary system and often influences what?
Answer: Interest rates and money supply
Bonus fact: Central banks pursue monetary and financial stability.