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3 February, 18:27

Which of the following is the one key interest rate to focus on when trying to forecast interest rate trends in the future?

a. Discount rateb. Mortgage ratec. Prime rated. Federal funds rate

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  1. 3 February, 20:29
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    d. Federal funds rate

    Explanation:

    The federal fund rate is considered risk-free hence, they will always be paid in time for the full amount. It is the basis for all the calculation to get the other rates in the markets. If the FED increases or decreases the federal fund rate then, all the others will change accordingly.

    IE: a change in the FED rate will change the CAMP of all companies and thus, changing the WACC as well
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Home » Business » Which of the following is the one key interest rate to focus on when trying to forecast interest rate trends in the future? a. Discount rateb. Mortgage ratec. Prime rated. Federal funds rate
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