Topic 2- BAFI3182

Hello! How are you today?

• I'm good

• tired

• sleepy

• I don't know how do I feel :)

Do you have any exciting finance news to share with us?

Nominal interest = Real interest + Inflation rate.

Did you remember this formula?

• Yes

• We have this formula???

• Can you explain this again?

What does "interest rates" NOT refer to?

• The cost of borrowing funds

• The rate of return from lending

• The opportunity cost of holding money

• The Time Value of Money

• The stock market index

If you deposit 100 million VND in Vietcombank, they offer the interest rate for 1 year is 5.1%. If it is simple interest rate, what is the future value of this amount?

• 151 M

• 105.1 M

• 115.1 M

• 151.1 M

Calculate the future value that you will receive, if you deposit 100 M VND in Vietcombank with the interest rate is 5.1%, in 3 years, compounding annually.

• 105. 115.1

• 105.1

• 116.09

• 106.09

Calculate the future value that you will receive, if you deposit 100 M VND in Vietcombank with the interest rate is 5.1%, in 3 years, compounding semi-annually.

• 116.31

• 107.85

• 113.35

• 115.3

What is the Effective Interest rate of the investment with the interest rate is 5.1%, compounding quarterly?

• 5.198 %

• 5.1 %

• 5.15%

• 5.2%

Have you read about Loanable funds theory?

• Yes

• No

The structure of interest rates include:

(1) Term structure: How interest rate vary with term (Time)

&

(2) Risk structure: How interest rate vary with risk

• YES, all clear

• Yeah

• I don't understand