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Chapter 5

EC223 Chapter Notes - Chapter 5: Interest Rate, Zero-Coupon Bond, Expected Return


Department
Economics
Course Code
EC223
Professor
Sharif Khan
Chapter
5

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
Determinants of Asset Demand
  !"#""$%&
 '("(") !"#""
$%&
 *+*,,"
!"#""$-&
. / "!0# ",#"1,"2
1 !"#""$%&
Supply and Demand in the Bond Market
3#"415!3#"""6
Bond DEMAND goes UP when interest rate are increasing
'(#!"1",!#1!
7888!
9'09$:-6&;6
I99!"#!
RETe 9'("
F9:
P 96
0#"
1""7<8,"("
$7888-7<8&;7<89889=9"'0
7<88
$7888-7<88&;7<889=#'01"2,
!"#""1"12
4!415!4""6
>#21",2,##
1"2",>##2!"
1#Bond SUPPLY goes UP when interest rate are
decreasing
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