 |  Money and Capital Markets: Financial Institutions and Instruments in a Global Marketplace, 8/e Peter Rose,
Texas A & M University
The Impact of Inflation, Deflation, Yield Curves, and Duration on Interest Rates and Asset Prices
Chapter Objectives
| You will discover what inflation is all about and how inflation can impact interest
rates and the prices of loans, securities, and other financial assets. |
| | | | You will understand why there is greater concern today than in the past about the
prospect of deflation—the reverse of inflation—and how it might affect the
economy and the financial system. |
| | | | You will see how yield curves arise and view the controversy over what determines
the shape of the yield curve at any moment in time. |
| | | | You will discover how yield curves can be a useful tool for those interested in
investing their money and in tracking the health of the economy. |
| | | | You will explore the concept of duration—a popular measure of the maturity of a
financial instrument—and see how it can be used to assist in making investment
choices and in protecting against the risk of changes in interest rates. |
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2003 McGraw-Hill Higher Education