Comment on the term structure of interest rate of Pakistan. Define the related terms in your explanation. Use at least two theories to explain the shape of yield curve.
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Explanation:
Interest Rate
Interest rate is basically the amount of interest for a specific period of time that is paid in accordance with the amount a person borrows from a bank or from some other source
Yield Curve
It is a curve that gives the relationship of interest rate and the time to maturity
In Pakistan in the last couple of years, there have been many changes in interest rate. It was quite stable at 7%, then it started to rise upto 13% and now due to current pandemic, this has again come down to 8%
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