Examine the effects of a change in interest rates on the price of equity and Government bonds. Briefly explain what other major factors affect the price of equity. 1911 Words
Date Submitted: 11/23/2004 09:46:10
Category: / Business & Economy / Economics
Length: 7 pages (2050 words)
Category: / Business & Economy / Economics
Length: 7 pages (2050 words)
<Tab/>Governments of countries finance many of their activities - for example public and merit goods provision and/or subsidisation - through borrowing from lenders by issuing bonds. In the UK government bonds are known as gilt edged securities and are referred to as 'gilts.' Responsibility for them is managed by the Debt Management Office (DMO) which is an executive agency of the Treasury.. They advise on debt issues and …
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…is also affected by many other technical influences. Each firm/company has factors which influence it more than others Increased globalisation and information flows has meant that everything is interlinked. However one basic rule of thumb applies, 'If the economy is booming then the price of equity will rise.'.
Bibliography
Michael Brett, How to read the Financial Pages (2000), Fifth Edition
Romesh Vaitilingham, Using the Financial Pages (2001) fifth Edition
David Cobham, Markets and Dealers, Longman 1992
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