Rate fundamentals and loanable funds

Rate fundamentals and loanable funds

Bachelor of Business Studies (BBS) — Fourth Year

Subject: Management of Financial Institutions (FIN 255)

Unit 2: Determinants of Interest Rates

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of rate fundamentals and loanable funds.
• Apply the relevant financial concepts or calculations and explain their assumptions, risks and analytical limits.

Curriculum Scope

• Interest rate fundamentals
• Review of loanable fund theory
• Movement of interest rates over the time

Detailed Microsyllabus

1. Interest foundations

   1. Time, risk and return.
   2. Loanable-funds supply and demand.
   3. Equilibrium under stated assumptions.

2. Rate movement

   1. Interpret historical rate changes.
   2. Separate nominal from real-rate concepts.
   3. Use consistent periods and instruments.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 86–88.

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. Examples involving current laws, rates, institutional products or Nepalese status must identify the relevant period and official materials; no changing numerical or legal requirements are invented here.