Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter1: Understanding The Financial Planning Process
Section: Chapter Questions
Problem 4LO: Examine the economic environments influence on personal financial planning.
Related questions
Question
.Why is knowledge of changing interest rates a significant aspect of personal financial planning?
Expert Solution
Step 1
Personal financial planning is very important for the purpose of increasing the rate of return. If you are taking loan also, the knowledge of interest rates is important so that you be able to reduce the overall cost of finance. Interest rates are the basis of financial market as it regulates through the change in interest over the period of time. With this, the advantage of arbitrage profit can be taken and we can have higher rate of return with the better application.
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