3-1 Looking back on 4 March 2008 when the interest rate was set at 7.25% by...

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Finance

3-1 Looking back on 4 March 2008 when the interest rate was setat 7.25% by RBA (Reserve Bank Australia), however since then RBAgradually reduced the interest rate to its lowest 1% on 3 July2019. Present an overview on the expectations or motivations behindsuch interest rate cut by RBA? (summary)

[Note: In the early 1990s the interest rate was 17.5%, you don’tneed to go back such distant past, your analysis should focusbetween 2008 to 2019]

3-2 Identify the possible impact of interest rate cut oninvestments in the capital market in Australia.

[Note: Here you can investigate the differences in impactbetween debt instruments and equity instruments in the capitalmarket, you can use table, chart, graph wherever you would find itappropriate]

3-3 Identify the possible impact of interest rate cut on theReal Estate market in Australia.

[Note: You can analyse the differences in impact between foreignsourced investment and local sourced investment in the Real EstateMarket, you can use table, chart, graph wherever you would find itappropriate]

3-4 There are four countries (Japan, Sweden, Denmark andSwitzerland) have negative interest rates. What could be theexpectations/ motivations to drop interest rate below zero?

Could you please give me a quick summary of the solution to eachquestion so that I may expand on this. It is for my currentjob.

Answer & Explanation Solved by verified expert
3.6 Ratings (651 Votes)
31 RBA cuts interest rate in order to grow the economy During the last 10 to 11 years an economy faces various challenges that is why RBA cuts its interest rate The various challenges includes an economy faces a problem of shortage of cash due to which the import and export of goods and services also gets reduced Due to high interest rate individuals does    See Answer
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