Abstract
This paper gives a simple explanation of the effects of interest rates on bond prices. This includes an examination of premiums, discounts and the yield curve. The effect of the amount of premiums compared with face value is also explored.

From the Paper
"The simple and basic answer to the question 'What is the relationship between interest rates and bond prices?' is simple. The relationship is inverse. What this project will attempt to do is demonstrate why this is true and what elements complicate the question. Yield to Maturity: There are two yields related to any bond the coupon rate and the yield to maturity. The coupon rate is stated rate of..."

Tags:Interest rates, bond prices, discounts

Abstract
This paper discusses private retirement plans and interest rates. The paper contends that private retirement plans will increase in importance for Americans over the coming years as a secondary source of income for retired Americans. The paper assesses that there is no direct relationship between the discount rate and the earnings of a pension plan's investments. However, the paper claims that constant fluctuations in the discount rate set forth by Congress make pension plan confidence uncertain.

Outline
Introduction
History of Discount Rates
Summary

From the Paper
"The strength of private retirement plans must be maintained in the upcoming years due to the increasing number of Baby Boomers who will be retiring in the United States. Many retired Americans rely on private pensions and employer-sponsored retirement savings as a secondary source of income in addition to Social Security (Brinner 131). In addition, because the human life expectancy has increased dramatically over recent years, it is very important that policymakers encourage the growth of employer-sponsored retirement plans (Hungerford et al. 13)."

Tags:retirement, savings, discount

Abstract
This paper explains that the Federal Reserve Bank (the Fed) was established in 1913 in response to serious economic instability in the United States because, at that time, bankers had few guidelines to asset reserves and loan policies; therefore, some communities were virtually controlled by private trusts. The author points out that the Federal Reserve Act, which divided the nation into twelve districts with twelve Federal Reserve banks, standardized banking in the U.S. (1) by requiring every bank in the country to deposit part of its money at its regional Federal Reserve Bank in order to guarantee liquidity, (2) which the Fed invests to earn interest; furthermore; (3) these regional Federal Reserve Banks are not governmental organizations but rather privately owned financial institutions owned by member banks with (4) a seven member Federal Reserve Board, appointed by the President, to oversee the system and to establish policy. The paper stresses that the greatest power given to the new Federal Reserve System was the power to slow or stimulate the economy by raising or lowering the new discounted interest rate.

From the Paper
"Despite the fact that the Panic of 1907 and the country's long history of bank panics and bank instability had shifted public opinion toward national economic reform, the American monetary system went unchanged for another five years. In the meantime, the lack of currency in circulation was creating a credit crunch in the United States. Then in 1912, congress passed the Aldrich-Vreeland Act to provide short-term aid by allowing national banks to issue notes on a wider range of securities, thus putting more money into circulation. As a more long-term solution, congress created a National Monetary commission to find ways in which to stabilize the American monetary system."

Tags:stability, cycles, depression, discount-interest-rate, standardized

Abstract
The paper discusses the Federal Reserve's role in determining the interest rate and the discount rate, as well as influencing the amount of money circulating in the economy. The paper looks at the actions of the Fed during the current economic crisis that aim to stimulate consumer spending, production and employment. The paper discusses how the difficulty of remedying the current situation with monetary policy alone highlights the need for federal action and spending to stimulate the economy.

From the Paper
"One of the most obvious tools from the consumer's point of view that the Fed possesses is the interest rate. When a recession seems imminent, the Fed lowers interest rates to make it easier for consumers to borrow money from banks and use other credit sources. As the 'bank's bank,' the Fed lowers the discount rate or the rate of borrowing it charges member banks. This means that banks can more easily borrow money from the Fed to meet their reserve requirements, or the amount of liquid assets they must keep to meet consumer demand. The Fed, to stimulate the economy, can also lower bank's reserve requirements, meaning the banks need to keep less available assets on hand. When the economy is expanding too quickly, and recession is a risk, the Fed can reduce the amount of currency circulating in the economy by raising interest rates, raising the discount rate, and raising reserve requirements, and also by selling government securities.
"When interest rates are low, people have a greater incentive to borrow and to spend money. That new car or home they have been 'putting off,' seems much more attractive when the interest rate is nearly zero! But perhaps "the most effective tool the Fed has, and the one it uses most often, is the buying and selling of government securities in its open market operations. Government securities include treasury bonds, notes, and bills. The Fed buys securities when it wants to increase the flow of money and credit, and sells securities when it wants to reduce the flow" (Obringer 2009, p.10)."

Tags:interest, rate, money, securities, unemployment, inflation

Abstract
This paper explains that the macro-economic changes in the USA and global economy were rather misleading in the 2005 and the reaction of some fundamentals on shifts in other variables was not typical and thus could not always be foreseen or predicted by the analysts. The author points out that one of the methods used to prevent the development of inflation is the manipulation of the official government interest rate or the Federal Reserve discount rate. The paper concludes that there are inflationary expectations in the economy; therefore, households try to consume in order not to lose the value of their cash.

From the Paper
"Inflation is also a very important measure of economic development and as mentioned above, high inflationary pressure on the economy has overall negative impact. CPI changes or the changes of consumer price index, in the beginning of 2006 compared to 2005 tendency are 3.9%. This rate was only 2.95% in fiscal year 2004, or comparing CPI at the beginning of 2005 with its rate at the beginning of 2004. The inflation in the 2003 fiscal year was even lower and at the rate of 1.97%, while it was 2.58% in 2002."

Tags:unemployment, gdp, consumer, confidence, inflation, reserve

Abstract
This paper looks at how corporations use applications to manipulate the time value of money in order to achieve a profit. The paper first looks at how some of the financial applications used include capital markets along with components of interest rates. The paper then looks at how international markets are a growing viable resource for funds when executing the various strategies. The paper concludes that combining all of the above successfully is the key to maximizing the effect of time value of money.

From the Paper
"The three major laws that govern security markets include the Securities Act of 1933, Securities Exchange Act of 1934, and the Securities Acts Amendments of 1975. In response to the stock market crash in 1929 the securities Act of 1933 was enacted by Congress. "The legislation wanted to ensure more transparency in financial statements so investors can make informed decisions about investment, and to establish laws against misrepresentation and fraudulent activities in the securities markets." (Daniels, 2005) The Securities Exchange Act of 1934 was created to protect the public by regulating transactions of the secondary market brokers and dealers."

Tags:discount, rate, future, earnings, capital, budgeting, techniques, fraudulent, activities

Abstract
The paper relates that money has present and future values as demonstrated in a sequence of equal payments made at equal periods, which is called annuity. The author points out that the present value of an ordinary annuity is its value at the beginning of the term, the value of one period before the first payment or the sum of discounted payments at the beginning of the term. The paper relates that future and present value analysis is a method of comparing the value received or expected to be received at different time periods.

Table of Contents
Effects of Annuities on PVM Problems and Investment Outcomes
Interest Rates and Compounding
PV (Future Payments Received)
FV (Investment)
Opportunity Cost (Amortization and the Rule of 72

From the Paper
"Generally, interest is specified in terms of a percentage rate for a period of time, usually a year. For example, interest at 10% means an annual cost of borrowing an amount of money, called the principal, is equal to 10% of that amount. The interest rate and the time period are assumed to be stated in common units. If $100 is borrowed at 10% annual interest, the total to be repaid is $110 - the amount of the principal, $100, and the interest for a year, $10 ($100x.10x1), using the simple interest formula i=prt where i=interest, p=principal, r=rate and t=time. "

Tags:interest, annuity, time-period, investment-decision, rent

Abstract
This paper is a heterodox assessment on the impact of artificially low interest rates by the European Central Bank (ECB) on the Irish behavioral microeconomic decision-making process of individual time preferences within the Austrian-school capital-based macroeconomic business cycle. Using secondary research, the author focuses on empirical evidence showing the impact of the ECB on the Irish property and equity bubble. The paper argues that simplification of a discounted utility model would have a greater impact on understanding the Irish economy because, despite the greatest expertise in the world, humans are still prone to the curse of too much knowledge and cognitive dissonance. The paper includes many figures and an extensive appendix.

Table of Contents:
Introduction
Literature Review
Method
Description and Discussion
Behavioral Microeconomics
Austrian School of Macroeconomics Business Cycle
Conclusions
Appendix Index:Quantitative Economic Data and Statistics of Ireland
Appendix A: Referenced in Project
Appendix B: Economic Output andGrowth
Appendix C: Balance of Payments, International Trade & Comparisons
Appendix D: Production & Construction Industries
Appendix E: Earnings & Competitiveness & Labor Force
Appendix F: Consumption & Debt

From the Paper
"A temporal point outside the frontier was created. This would allow resources be allocated for massive investment and consumption. The country was dangerously overheating. Unemployment was at an extreme minimum and hours worked surged. Imports temporarily increased to satisfy scarcities, but more importantly the gap between the twp equilibriums of saving and investing was facilitated by extreme levels of fractional reserve banking ratios as money flowed in from Europe. Ireland's external debt soared to almost E2 Trillion (including IFSC International Financial Sector)."

Tags:intertemporal recapitalizations, cognitive dissonance, people, discounted utility model

Abstract
This paper discusses the economy, stating that keeping interest rates steady and controlling the expansion of the money supply over the course of the rest of the 2007 fiscal year seems prudent on the part of the Fed, unless unemployment begins to increase precipitously or economic growth sharply contracts at a steady level over the course of the next few months. This paper further asserts that the Fed should continue to make curtailing inflation the cornerstone of its fiscal policy. It should maintain high reserve requirement, sell government securities at the same rate to avoid a sharp influx of currency into the marketplace by lending banks, and keep the discount rate at current levels. Furthermore, it says that although this moderation may not yield exuberance on Wall Street, it also will not sharply contain growth and propel the economy into recession, either.

Outline:
Behavior of key 2007 macroeconomic variables--Review of Federal Reserve policy
Assess the Federal Reserve policy over the year--Recommendations & Predictions

From the Paper
"However, it should be reminded that not only did economic growth slow sharply in the first quarter of this year to an annual pace of 1.3% but that this was the slowest growth the economy has shown in the past four years (Andrews, 2007). This slow economic growth demonstrates that the Fed's refusal to reduce rates, even in the wake of an increase in unemployment, however incremental was not an easy or clearly indicated decision. Also, there was no statement was released as to why 2% a year as decided upon as an official target. However, according to William Poole, the President of the Federal Reserve Bank of St. Louis, ideally, the Fed views the optimal rate of inflation as zero, only allowing for small 'biases in price indexes' (Poole, 2005)."

Tags:economy growth policy monetary currency, federal reserve

Abstract
This paper explains that the accounting policies of Intel Corporation, the world's largest semiconductor chip maker, demonstrate equity interest in a range of private and public companies, mainly for strategic reasons and to improve earnings in weak years. Whereas, the accounting policies of Advanced Micro Devices, Inc. (AMD), Intel's chief competitor, show evidence of a big-bath scenario. The author uses a variety of accounting procedures to compare the ratio analysis, levers of conservatism and earnings management of these two companies. The paper includes 18 tables and has endnotes instead of a bibliography.

Table of Contents:
Introduction
Ratio Analysis
Table 1: EC Ratio Analysis
Table 2: Ratio Analysis
Table 3: Advanced DuPont Model
Levers of Conservatism
Revenue Recognition
Depreciation
Table 4: PP&E and Depreciation & Amortization
Allowances for Accounts Receivable
Table 5: Allowances for Accounts Receivable
Product-Warranty Reserves
Table 6: Warranty Reserves
Inventories
Table 7: Inventories
Stock-Based Compensation
Table 8: Stock-Based Compensation
Table 9: Historical Volatility of Stocks and Implied Volatility of Stock Options
Retirement Benefit Obligations
Table 10: Retirement Benefit Obligations
Earnings Management
Operating Leases
Table 11: Operating leases at Intel
Table 12: Discount Rate Calculation for AMD
Table 13: Operating Leases at AMD
Off-Balance-Sheet Liabilities
Impairment of Intangible Assets
Subsidiaries
Table 14: Timeline of Events for AMD's Investment in Spansion Inc
Table 15: Intels' Equity Investments as per December 29, 2007
Restructuring Charges
Table 16: Restructuring Charges and Offsetting Gains at Intel
Repurchase of Common Stocks
Table 17: Number of Shares and EPS at Intel
Conclusion
Table 18: Consolidated Statements of Income and Balance Sheets at Intel and AMD

From the Paper
"Intel uses useful lives of 2 to 4 years to depreciate its equipment (which includes machinery), while AMD uses useful lives of 2 to 6 years for equipment depreciation purposes. In Table 4 below we can see that Intel's estimated total average life of PP&E is 10 years in the last three years, while AMD's fluctuates between 5 and 9 years. (The estimated total average life is calculated by dividing the gross PP&E by the depreciation expense.) The generally longer average total life at Intel can be explained by the fact that it has a higher proportion of buildings in its PP&E mix (e.g. 33% vs. AMD's 14% in 2007)."

Tags:conservatism, dupont model, warranty reserves, stock, discount rate