Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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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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