Purchase Solution

Discount Rate

Not what you're looking for?

Ask Custom Question

The following question asked that suppose you have $5,000 to invest. At a restaurant, youoverhear someone saying that the Fed is almost certain to increase the discount rate dramatically. If this rumor is correct, do you think that you should invest now or wait until after the increase in the discount rate? Or doesn't it matter? Be sure to explain the reasons for your preference (or lack of it) in this regard.

Purchase this Solution
Solution Summary

Discount rate is discussed in the solution.

Solution Preview

If I had $5000 to invest, I would disregard the rumor because the discount rate is the rate which banks can borrow ...

Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

View More Free Quizzes
Related BrainMass Solutions

  • Capital Budgeting: A Project's Net Present Value

    - If the discount rate is 4%, what is the project's net present value? - If the discount rate is 8%, what is the project's net present value? - If the discount rate is 10%, what is the project's net present value?

  • Capital Budgeting: Net present value, IRR, discount profile

    If the discount rate is 4%, what is the project's net present value? If the discount rate is 8%, what is the project's net present value? If the discount rate is 10%, what is the project's net present value?

  • Calculate the Discount Rate

    What is current discount rate= ______% The formula we use in this case is: Discount rate = Return on assets * retention rate Discount rate = .10 * .40 Discount rate = .04 Discount rate = 4 percent This solution illustrates how to compute the discount

  • Finance: Capital budgeting.

    If the discount rate is 2%, what is the project's net present value? If the discount rate is 6%, what is the project's net present value? If the discount rate is 11%, what is the project's net present value?

  • FOMC goals

    (Because primary credit is the Federal Reserve's main discount window program, the Federal Reserve at times uses the term "discount rate" to mean the primary credit rate.) The discount rate on secondary credit is above the rate on primary credit.

  • Algebra: Simple Interest

    note for $6,300 at an ordinary bank discount rate of 8.72%, for 60 days.

  • Finance: Capital budgeting.

    * If the discount rate is 2%, what is the project's net present value? * If the discount rate is 6%, what is the project's net present value? * If the discount rate is 11%, what is the project's net present value?

  • Discount rate

    This is why an individual's discount rate cannot be different from the bank's interest rate. Discount rate

  • A discussion of the rates set by the Federal Reserve

    This piece explores the discount rate, the federal funds rate, and the prime rate and how they are adjusted by the Federal Reserve.

  • Present Value and Bonds

    discount; the purchaser for the above market discount rate c. premium; the seller for the above market coupon rate d. discount; the seller for the above market coupon rate e.

View More Related Solutions