Bank interest rates.ppt

Chen Jianhui Interest Rate 利 率 Part One: What is interest rate? The owner of an asset who does not need it at the moment can (1) sell it and surrender possession permanently or (2)rent it and regain possession at the maturity of the rental period. In the absence of a psychological preference for owning an asset per se, the owner (or buyer of the services would be indifferent between selling (buying) or renting the asset if the sum of the expected rental fees over its expect life, discounted to the present by the market rate of inter (the present value), were equal to the price of the