Interest rate structure and determination

Interest rate structure and determination

Bachelor of Business Studies (BBS) — Third Year

Subject: Foundation of Financial Systems (MGT 226)

Unit 2: Financial Instruments and Interest Rates

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of interest rate structure and determination.
• Explain the financial-system relationships and interpret their roles using clearly identified institutional and reporting contexts.

Curriculum Scope

• Components of interest rates
• Term structure of interest rates
• Determination of interest rates in Nepalese financial markets

Detailed Microsyllabus

1. Rate components

   1. Basic return and relevant risk premiums.
   2. Nominal and real-rate relationships.
   3. Factors affecting observed borrowing or lending rates.

2. Term structure and Nepalese determination

   1. Maturity-related yield patterns.
   2. Compare explanations of the term structure.
   3. Use dated Nepalese market or regulatory information for examples.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 60–62.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Nepalese current-status discussions should identify the reporting period and use dated official publications, such as Nepal Rastra Bank reports, rather than undated figures.