THE IMPACT OF INTEREST RATE ON INVESTMENT DECISION IN NIGERIA AN ECONOMETRIC ANALYSIS

CHAPTER ONE INTRODUCTION

1.1      Background of the Study

Investment is the change in capital stock during a period. Consequently, unlike capital, investment is a flow term and not a stock term. This means that capital is measured at a point in time, while investment can only be measure over a period of time.

Investment plays a very important and positive role for progress and prosperity of any country. Many countries rely on investment to solve their economic problem such as poverty, unemployment etc (Muhammad Haron and Mohammed Nasr (2004).

THE IMPACT OF INTEREST RATE ON INVESTMENT DECISION IN NIGERIA AN ECONOMETRIC ANALYSIS

CHAPTER ONE INTRODUCTION

1.1      Background of the Study

Investment is the change in capital stock during a period. Consequently, unlike capital, investment is a flow term and not a stock term. This means that capital is measured at a point in time, while investment can only be measure over a period of time.

Investment plays a very important and positive role for progress and prosperity of any country. Many countries rely on investment to solve their economic problem such as poverty, unemployment etc (Muhammad Haron and Mohammed Nasr (2004).

MARKET PERFORMANCE AND VOLATILITY

2.1.4   MARKET PERFORMANCE AND VOLATILITY

There  is  a  strong  relationship  between  volatility  and  market  performance. Volatility tends to decline as the stock market rises and increase as the stock market falls. When volatility increase, risk increase and returns decrease. Risk is represented by the dispersion of returns around the means the greater the dispersion of returns around the means, the larger the drop in the compound return.

VOLATILITY’S IMPACT ON MARKET RETURNS

2.1.3  VOLATILITY’S IMPACT ON MARKET RETURNS

Many investors realize that the stock market is a volatile place to invest their money. The daily quarterly and annual moves can be dramatic, but it is this volatility that also generates the market returns investors experience.

INTEREST RATE AND CORPORATE FINANCE

2. 1.2 INTEREST RATE AND CORPORATE FINANCE

There is no doubt a theoretical link exist between interest rates and the financial structure of firms. Interest rate operate through their influence on the cost of capital to the investors as well as a returns to various groups of savers. A change in the interest rate affects the debt-equity choice of a firm, the overall cost of capital and real interest rates,

Interest Rate Volatility and Investment Determination in Nigeria.

CHAPTER TWO

2.0      LITERATURE REVIEW

2.1     THEORETICAL LITERATURE

2.1.1  Interest Rate Volatility and Investment Determination in Nigeria.

The variation of short-term and long-term interest rate is a prominent feature of the economic events such as changes in Federal Policy. Crises in domestic and international financial market in the prospects for long-term economic growth and inflation. However, economic event such as these, tends to be irregular (Keith

THE IMPACT OF INTEREST RATE ON INVESTMENT DECISION IN NIGERIA AN ECONOMETRIC ANALYSIS

CHAPTER ONE INTRODUCTION

1.1      Background of the Study

Investment is the change in capital stock during a period. Consequently, unlike capital, investment is a flow term and not a stock term. This means that capital is measured at a point in time, while investment can only be measure over a period of time.