Schemes such as Millionaire Destiny Savings Account and Ghina Savings Account offer a nominal rate of interest
along with a chance to win a million dirhams.
In order to keep the real return on financial and real assets constant, the nominal rate of interest
must adjust to the expected rate of inflation.
The real rate of bank deposits has also turned negative since inflation has been higher than the current nominal rate of interest
for four consecutive months.
At its pounds 100 face value this stock's "coupon" or nominal rate of interest
is a slim 1.
Most pay only a nominal rate of interest
, cancelled out in many cases by charges or fees.
Suppose the monetary authority pegs the nominal rate of interest
for the duration of the period in question.
In line with that example, a consequence of the interest rate rule is that the short-run "leaning against" fluctuations in the nominal rate of interest
leads to greater medium-term volatility in inflation and the nominal rate, which is related to concerns expressed by Friedman (1968) and Poole (1978).
The competitive bank discounts the nominal profit stream by the nominal rate of interest
, and maximizes the time 0 discounted stream, denoted by [[?
The sheet describes the product itself and includes the nominal rate of interest
, the annual percentage rate of charge (APRC), the amount of the loan granted, the term of the loan, early repayment possibilities, redress procedures, etc.
Standard macroeconomic theory states that consumers are induced to put off present consumption on the basis of the nominal rate of interest
Following Brigham, Gapenski and Ehrhardt (1999) we can express the nominal rate of interest
, K, as equal to K*+IP+MRP+DRP+LP, where K* equals the real risk free rate, IP the average expected inflation over the time period, MRP the maturity risk premium, DRP the default risk premium and LP the liquidity premium for the security in question.
7) Thus, our specific assumption is that the nominal rate of interest
is known but the real interest rates for each good are unknown because absolute price changes are unknown.