Ba 3303 exam 2 solved - Study guides, Class notes & Summaries

Interest rates - ANSWER--The cost of borrowing money stated as a percentage of the loan -A measure of what an investor can expect on a debt related investment. Basis point - ANSWER-Common term for a unit of interest rates in finance 1 basis point = .01% 100 basis points = 1.00% Nominal interest rate - ANSWER-Interest rate that is observed in the marketplace Risk free rate - ANSWER-Interest rate on a debt instrument with no default, maturity, or liquidity risks (Treasury securities ar...