I am calculating a currency swap for my international finance class. Do I use LIBOR to calculate my cash inflows? Where can I find the interest rates in France on Oct 1 and 2nd of 2008?
Is there a general rate of interest for deposit accounts in Euros?
This is a good site to use, http://www.xe.com/ucc
At what rate would I receive interest if I swapped USD for Euros?
March 14th, 2010What are the interest rates now for a home loan?
March 14th, 2010Hey, Im looking at buying my first house now.. Whats the interest rates for a home loan these days after that 1% interest rate cut from the rba the other day which the banks said they would pass on.. if they do.
Hi Anubis,
With the reserve bank lowering rates on Tuesday a number of the lenders have already passed the rate cut on. You should be looking at a variable rate of around 4.69% and upwards, with that in mind in the coming days the banks will be playing around with their rates to ensure they are competitive. So depending on what type of features you require in your loan you should be able to get a loan with a mid to high 4% to a low 5%.
I would advise going to speak with a professional mortgage broker so they can show you all your options and explain them further.
I would be more than happy to help you with that.
James Grady
Mortgage Planner/broker
http://www.theNEXThomeloan.com
1300 660 107
Is it safe to jump from bank to bank for saving rate?
March 14th, 2010I just don’t know if it safe to jump from one bank to another for a higher interest saving rate? I have around $15k and would like to earn the highest return as i can on a short term without any risk. I don’t want to put into CD account for more than a year cause i might missed other great offer from other bank.
1) is it easy and safe to switch from one to another?
yes it is posible to change your bank for higher return but before jumping you should strenght and rating of the bank in which you transfer your money.
Should I refinance my home loan? I bought a twnhse in Riverside, CA in Oct. 2007 for 317k. I owe 300k .more?
March 14th, 2010..on the loan. I don’t want my value to drop below what I owe on the loan, but I also don’t want to waste a bunch of money on a refi if I don’t need to. I’m in a 30 yr interest only. It’s fixed at 6.75% for 7 years then it’s a LIBOR ARM.The payment’s $1,888 a month. I’d like to get into a 30yr fixed P&I. Now that the rate’s have dropped considerably is a refi worth it? Thanks for the ADVICE.
You might want to first check out and see what your homes value is right now as of today. Due to the steep drop in home values many lenders and banks are considering your neck of the woods as a DECLINING MARKET, which means that they are now reducing the amount that they will loan to you by 5% or more. It could be that you might have to dish out some out of pocket cash in order to be able to do anything at all (may not be cost affective). Don’t take my word on it, but make sure to inquire with a few of your Local banks or mortgage brokers, or even call the lender that you have your loan with now.
Make sure to price out your loan with your LOCAL banks and mortgage brokers only.
A lot people giving advice on here are also looking to give you a loan (its not advice, its advertising), if they are not local to you and you can’t get to them within 1 hour don’t fall for it. They say they are licensed in all 50 states, what does that mean? Which state do you have to look in first if something goes wrong? KEEP IT LOCAL; DON’T GET RIPPED-OFF BY SOMEONE IN WHO KNOWS WHERE WHICH YOU WOULD HAVE NO DIRECT ACCESS TO.
Remember Buddha’s advice:
"Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense." You are the only "expert" you can trust: All brokers, and every other loan officer guru giving advice here with a .com or contact me at the end is "selling" you something (its not advice, its advertising). Don’t buy "it."
Why have stocks and bonds moved in the same direction recently?
March 14th, 2010The commentary I’ve read says that stocks have a bad day when investors are afraid that interest rates will go up. But rising interest rates make bonds go down too! Is the historical advice–stocks and bonds move in opposite directions–no longer valid? Or is this just a temporary anomaly?
Bond returns and stock returns can move together or in other directions. The reasons are different.
For example, if there is a shift in demand, it could be good for one asset and bad for the other. In late 1987, there was a "flight to quality" where people sold off their equity positions and bought bonds. This caused stock prices to fall and bond prices to rise. There have been other times where demand for bonds fell and demand for stocks rose — causing the opposite effect.
But suppose that there is no shift in demand between the two asset classes. Then if yields increase, the present values of a bond’s future cash flows will decrease causing people to lose money in the bond market. But if rates go up, then the expected return of stocks also rises. If there is no corresponding increase in the expected cash flows of stocks, their value would also have to fall.
Over the long run, returns on bonds tend to be positively correlated. The beta on investment grade corporate bonds, for example, is usually between 0.10 and 0.35.
Here is another reason why corporate bonds should be positively related to stock price. Suppose a company is debt. If the company’s stock goes up — then the company is worth more. If it is worth more, the debt becomes safer. If the debt becomes safer, it increases in value.
With mortgage rates being the lowest in years, will my adjustable rate go lower when it comes to renew?
March 14th, 2010I have an adj mortg rate, that’s set to renew in september, and with mortg rates being low right now, could it go lower than it is now? Right now it’s high, and that’s what my mortgage started with…not a low int rate.
one has a ARM(Libor index), and the other is a fixed rate.
It is possible, but not likely. Instead I suggest you look into refinancing to a better FIXED rate.
What effect does an increase in the interest rate have on inflation?
March 14th, 2010I know that if the inflation rate increases that the interest rate will also increase, because lenders will realize that they have to charge a higher interest rate in order to accommodate for inflation.
However, when a central bank implements policy that changes the interest rate, does this have an impact on inflation? If so, how?
When the Federal Reserve wants to increase the interest rate, the Fed sells bonds.
When you sell something, it means you’re giving someone a good and they’re giving you money. The Fed is taking money and giving investors bonds. In other words, the Fed is decreasing the money supply, and decreasing the money supply lowers inflation.
Edit: If you want to be wrong, listen to the guy below me who clearly doesn’t understand economics. He’s wrong because when the Fed sells bonds on the market, the money doesn’t go back into the money supply (until the Fed buys bonds again).
What happens to make the 1 year LIBOR rate rise?
March 14th, 2010
this rate is the london interbank offered rate (LIBOR) is the rate which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers’ Association. The LIBOR is derived from a filtered average of the world’s most creditworthy banks’ interbank deposit rates for larger loans with maturities between overnight and one full year.
Currency swap
March 12th, 2010
Brief illustration of a fixed-for-fixed currency swap (e.g., dollars for euros). Please note: in a plain vanilla interest rate swap, we referred to the NOTIONAL because it is not exchanged (in that case, the notional is required only to compute the interest). However, in a currency swap the PRINCIPAL is exchanged.
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