Market Interest Rates
There is a market for investments which ultimately includes the money market, bond market, stock market and currency market as well as retail financial institutions like banks.
Exactly how these markets function are sometimes complicated. However, economists generally agree that the interest rates yielded by any investment take into account:
- The risk-free cost of capital
- Inflationary expectations
- The level of risk in the investment
- The costs of the transaction
This rate incorporates the deferred consumption and alternative investments elements of interest.
Read more about this topic: Interest Rate
Famous quotes containing the words market, interest and/or rates:
“The only reason to invest in the market is because you think you know something others don’t.”
—R. Foster Winans (b. 1948)
“I cannot assent to a measure which stains our credit. We must keep that untainted. We are a debtor nation. Low rates of interest on the vast indebtedness we must carry for many years, is the important end to be kept in view. Expediency and justice both demand honest coinage.”
—Rutherford Birchard Hayes (1822–1893)
“In the U.S. for instance, the value of a homemaker’s productive work has been imputed mostly when she was maimed or killed and insurance companies and/or the courts had to calculate the amount to pay her family in damages. Even at that, the rates were mostly pink collar and the big number was attributed to the husband’s pain and suffering.”
—Gloria Steinem (20th century)