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3

The interest is calculated on a daily basis. There are several algorithms described in Wikipedia how exactly to do that, but roughly spoken, you accrue interest for every day with the balance for that day. For example, if you put $1000 into your account, keep it there for 20 days, then add $2000 and withdraw $500 the day after, after another 10 days you ...


10

If we exclude speculation about future value, there's one rather simple reason to buy such a bond: If you're looking for a safe way to store a lot of money, this is in fact the cheapest option. Let's assume you're a bank with a lot of money that your customers gave you. This money must be stored somewhere. Of course you can lend it to other customers ...


1

Why would one buy a bond with a negative rate? Buying a bond with a negative redemption yield can be profitable in real terms in a period deflation. If deflation sends prices down by 4% and you receive back 99% of your money, then in "real terms" you are up (about) 3%. Compare this to buying a bond with a positive redemption yield, buy whose yield is ...


-3

Because you expect to sell the bond at $102 as soon as possible who cares about what happens in 5 years


5

According to A Model for the Federal Funds Rate Target at page 13 changes as small as 6.25 basis points were sometimes observed prior to 1990 Similarly, according to The Relationship Between the Federal Funds Rate and the Fed's Federal Funds Rate Target: Is It Open Market or Open Mouth Operations? at page 4: In late 1989 the Fed began the practice ...


-6

If Fed is really using statistical techniques, then it is impossible to come at an answer in multiple of 25 points unless they are targeting an objective, else they are using guess work and using tradition as the excuse. OLD quarter point system, could benefit the ultra rich, they should use the decimal points increase similar to stock market. Doctors ...


7

I'm pretty sure it's just a policy that the Fed seems to follow. I know of no mechanical reason why they couldn't use more precise increments, but possibly for simplicity (or tradition) they choose to use more granular rates than other countries seem to. Keep in mind that influencing interest rates is an inexact science. The Fed will set rates at a certain ...


1

If you want to protect yourself from negative interest rates, the best way is to invest into long enough government bonds. The value of a bond increases as interest rates decrease, and decreases as interest rates increase. Essentially, by buying long government bonds, you are "fixing" the interest rate you are getting for the bond part of your portfolio. ...


2

For the US to accomplish negative interest rates it has to drastically increase the money supply - which it has several ways to do - but the outcome is that assets become more expensive. More practically "it costs more money to purchase the same value". Think of it like rapid inflation. Owning assets would then be the best way to preserve your wealth. Real ...


1

Retailers and websites asking for donations use PayPal to accept money because some people don't trust most websites with their credit card numbers, fearing that these sites might store their credit card information insecurely


2

With Western Union, there are different charges depending on how the sender funds the payment either with a bank transfer, cash, credit or debit card and how the recipient accesses the money. What's really happening here is there are different charges depending on the risk of fraud and charge back in the input. Different types of payment carry different ...


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