Commercial banks will benefit because they will be able to earn a rate of return on projects which they could not finance on their own.
The premise that impact investors can earn market rate returns (whatever that means these days) is fundamentally flawed: social entrepreneurs operate in much more complex environments with poor or nonexistent infrastructure.
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Banks should like it because interest-only mortgages earn a premium rate and they get to lock in low-risk assets at their current depressed values.
As with a remainder trust, the IRS takes a snapshot of the deal when it's created, assumes the assets will earn a set rate of return--now just 7.2% --and taxes the assets being passed to heirs based on that.
If the project performs as the city expects over the 25-year term of the taxable and tax-exempt bonds, the developers will be repaid their principal and earn an interest rate ranging from 6% to 9%, said Rodney Crim, executive director of the St.
Robert Stammers, Director of Investor Education at the CFA said that while Baidu represented the potential for opportunities in the global market, investors should not expect to earn a great rate of return by simply choosing investments with high historical returns like Baidu or choosing the stock as a means to participate in the Chinese economy.
They can earn only a nugatory rate of interest on these stocks (by lending them out) compared with what they can earn on government bonds.
Series EE bonds are sold at half the face value and earn an adjustable interest rate (recently 4.3%) that compounds semiannually.
If the fund can't earn back this hurdle rate plus the category benchmark average by clever stock selection (or reduce risk significantly), you shouldn't own it.
Solar power stations can currently earn 30.7p per kWh of electricity fed into the National Grid but, after subsidies are cut, new projects will earn a much lower rate.
Now, you must work backward to solve the loss of that rule-of-thumb: To earn at those same rate today, you will need more stocks and possibly a venture into lower-grade credit.
You might conclude that there will soon be a run on furniture showrooms, since keeping your cash under the mattress would actually earn you a higher rate of return than paying the government to hold your money.
Before the Fed delved so deeply into rate manipulation, it was possible to earn enough on bank CDs to cover the rate of inflation and then some.
In a world where Federal Reserve zero-interest-rate policy has made it impossible to earn any real yield the 10-year Treasury rate is well below 2% on standard-issue bonds, the income payout on high yield bonds (the polite term for junk) is proving too hard to resist.
And when interest rates rise they can increase the interest rate spread they earn.
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Banks generally will not lend funds in the money market at an interest rate lower than the rate they can earn risk-free at the Federal Reserve.
For richer entrepreneurs who can finance themselves, on the other hand, an investment is worth doing if it exceeds the opportunity cost of capital, ie, the rate they can earn by putting their money in the bank.
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That means the more customers who come back to the same massage technician, the more points he or she will earn, and the higher the rate of pay.
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For starters, the lack of a decent recovery means that the Bank of England may have to loosen monetary policy even further this year, meaning that the market interest rate that foreigners can earn holding sterling will stay very low.
The notion behind the yardsticks is simple: a company creates value only if the return on its capital is greater than the opportunity cost of it, or the rate that investors could earn by investing in other securities with the same risk.
In fact, the rate of return you can earn today on high yield bonds (6.61%) is the lowest absolute yield on record.
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When you do not believe you can earn rates of return greater than the rate of interest on your mortgage from your investments.
If I have learned anything, it's that people, companies, municipalities, states and even nations will often borrow at a greater rate than their ability to earn.
Without the low interest rates, some borrowers are simply giving up because they can't earn enough to justify paying a higher rate or throwing in additional equity.
The fact that there is a lot more variation than usual in the rate of return you can earn investing in different parts of the economy also backs up his case.
Plus, by saving for certain goals together, you can earn a larger return on a high interest rate.
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Is it fair for everyone to pay the same rate, or for those who earn more to pay more?
Does the consultant have an obligation to disclose the additional money it will earn from providing brokerage services or that the rate it is proposing may be more than another broker might charge?
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