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: 11/21/2002 15:16:52
Category: / Business & Economy / Economics
Length: 8 pages (2091 words)
Category: / Business & Economy / Economics
Length: 8 pages (2091 words)
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 organize the auctions of gilts …
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…equity will rise.'.
1 Michael Brett, How to read the Financial Pages, p210
2 These assumptions are a little unrealistic but serve to illustrate the point. It's very unlikely that the yields expected for the 3 different length stocks would be the same.
3 Michael Brett, How to read the Financial Pages, p399
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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