Role of interest rates in establishing commodity prices

Related BrainMass Solutions

• Interest Rates in Establishing Commodity Prices

  The interest rate in establishing commodity prices are determined.

• futures market

  These results can lead to reductions in prices and interest rates paid by consumers.

• Stock Market Crashes of 1987 and 1989

  Interesting, the drop in interest rates that coincided with the collapse in energy prices at the end of 1985 helped create the commodity price rise through 1987 and 1988 that helped drive interest rates and stock prices into the stock market crash.

• Risk in investing in financial markets

  There are a number of risks in investing in financial markets. Financial investments like stocks and bonds can be affected by Commodity Price Risk, Headline Risk, Rating Risk, Inflationary Risk, and Interest Rate Risk etc.

• international financial management

  The company maintain foreign currency, commodity price and interest rate risk management strategies that seek to reduce significant, unanticipated earnings fluctuations that may arise from volatility in foreign currency exchange rates, commodity prices

• Demonstrate, using supply and demand analysis, the impact on the equilibrium price and quantity of new Hybrid automobiles when the following occurs

  Interest Rates Decrease So, a decrease in interest rates has a few effects. Firstly, it should result in cheaper financing costs and lead to an increase in unemployment.

• Exchange Rate Fluctuations: Causes and Impacts

  Australia being one of the largest suppliers of commodities in the world, any spike in commodity prices will appreciate the AUD. 2. If the small country decides to increase money supply it will push down interest rates.

• Derivatives as a risk management tool

  According to Keown et al. (2002), futures (also termed as futures contacts) may be used to lock in the following: 1. prices of commodities and raw materials that are used in production, 2. interest rates on debt, and 3.

• The U.S. Federal Bank

  Some effects are an increase in net exports, reduced international purchasing power, increasing commodity prices, and upward pressure on interest rates.