R Notebook

L3

#L3.1 # We are going to find and compare the 13-week treasury bill rates at the end of the school termm and compare to the beginning of the school term.

library(quantmod)
getSymbols("TB3MS", src = "FRED")

These are the monthly published 3-month treasury bill secondary market rates

We will first find the monthly average for the end of term at September 2024.

EoT_Rate <- TB3MS["2024-09-1"]
print(EoT_Rate)

We will now find the monthly average monthly rate at the beginning of the school term at May 2024.

BoT_Rate <- TB3MS["2024-05-1"]
print(BoT_Rate)

#Comparing the rates we see that at the end of the school term, the interest rate is 0.53 percentage points lower than the beginning of the school term.

#L3.2 # Interest rates change over time for a number of reasons: # Firstly, the federal reserve set benchmark interest rates. This is to control inflation and to influence economic activity, with lower rates encouraging economic participation, and higher rates attempting to control inflation and slow down the economy. # With respect to inflation. Higher inflation causes money to lose purchasing power, so lenders demand higher interest rates to offset the cost. # Another reason can be global crises or economic uncertainty. Shocks to the economy or uncertainty about the future can drop interest rates as investors flock to safe assets such as treasury bills. # Relating to the treasury bill rates. Treasury bill short term rates are often closely linked to interest rates as their demand is determined by investor sentiment about the market.