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Comment by + M.Tariq Malik on June 7, 2020 at 2:45pm

For MGT411 GDB Solution & Discussion Check this link 

https://vustudents.ning.com/group/mgt411moneybanking/forum/topics/m...

Comment by Muhammad Azeem on June 7, 2020 at 2:43pm

“MGT411 Assignment / GDB No 01 Solution & Discussion Due Date: _08-JUNE-2020”

SEMESTER SPRING 2020

Money and Banking (MGT411)

GDB No. 1 

Due Date: June 08, 2020                                                                                                                                              Marks: 5

 

Learning Objective:

 

The objective of this question is to enable the students to understand the difference in nominal interest rate and real interest rate and its importance for lenders and borrowers.

 

Discussion Question:

 

It is important to understand the difference between nominal interest rate and real interest rate. Nominal interest rate is expressed in terms of current dollars as used in present value calculation where the purpose is to assess the amount of money you would pay today for fixed payments in the future. In case of borrowers and lenders; inflation is another important factor as they are concerned about the purchasing power of money and there is possibility that inflation may change the purchasing power of dollars. So there is a need to use inflation adjusted interest rate that is real interest rate. It equals to nominal interest rate minus inflation and expressed in terms of purchasing power. This phenomenon is best expressed by Irving Fisher in the form of Fisher equation that states that nominal interest rate ‘i’ is equal to real interest rate ‘r’ plus expected inflation ‘π^e’.

Keeping this in mind; answer the following questions:

 

• If there are equal chances of being paid back; whether 8% nominal interest rate is more attractive to a lender or 5% nominal interest rate? Explain your answer.

 

• Also explain in the context of Fisher equation; what compensation a borrower is giving to a lender when he pays nominal interest rate?

 

 

Important Instructions:

1. Your discussion must be based on logical facts.
2. The GDB will remain open for 07 working days.
3. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
4. Obnoxious or ignoble answer should be strictly avoided.
5. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over.

Comment by Laraib raja on January 20, 2018 at 12:09am

uplode mgt411 gdb solution

Comment by Binte Ahmed on August 8, 2016 at 12:44pm

Spring 2016

Final Term Syllabus

Dated: Jul 29, 16

Dear Students, The upcoming final-term paper of the course will cover the contents from Lectures # 19-45 lectures only. Therefore, you are advised to get understanding of all the topics discussed in the above mentioned lectures for the comprehensive preparation of your syllabus. So be proactive, work hard and prepare yourself for upcoming exams with full devotion and determination. In case of any problem, feel free to write us at mgt411@vu.edu.pk. We are here to help you in every way possible. Wish you best of luck for your Final Term exams.

Comment by Seema Saleh on May 31, 2016 at 5:19pm

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Comment by +★ HAMMAD ★ on September 17, 2014 at 3:17pm

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Comment by Dua Mughal on September 23, 2013 at 1:50pm

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Comment by zalma coca cola peela dy on August 4, 2013 at 3:24am

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