Bank interest rates课件.ppt

Chen Jianhui Interest Rate 利 率 Part One: What is interest rate? The owner of an asset who does not need it at the moment can (1) sell it and surrender possession permanently or (2)rent it and regain possession at the maturity of the rental period. In the absence of a psychological preference for owning an asset per se, the owner (or buyer of the services would be indifferent between selling (buying) or renting the asset if the sum of the expected rental fees over its expect life, discounted to the present by the market rate of inter (the present value), were equal to the price of the asset. If the price exceeds the sum of the discounted expected rental values, the owner would prefer to sell the asset and the buyer would prefer to rent it. The price and rental fees would adjust until they were in equilibrium again. equilibrium: 平衡 Of course, many of us get a psychological kick out of owning an asset rather than renting one. Owning our own home, automobile, or even book gives us a sense of pride and success that cannot be obtained from renting their counterparts. get kick out of … be excited because of 由于…...感到兴奋 This value of ownership can be converted into monetary terms and added to the ownership price. Ownership pride is less important to business firms, which are motivated more highly by monetary values. 所有权价值可以转换成货币单位，并增加所有权的价值。所有权的自豪感对于商业公司来说不太重要，这些公司所追求的是货币值。 The annual rental tee may be viewed as the owners return on the asset. Assume that you required transportation services for the next year that could be provided only by an automobile. You have the option of buying an automobile and selling it after one year or of leasing the automobile for the year. If you rented, the market rental fee would be the sum of two component fees -- the pure rental price and depreciation. During the duration of the rental contract, the rental agency would not be able to use the services of the automobile. As a result, you would have to compens