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
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—R. Foster Winans (b. 1948)
“A man’s interest in the world is only the overflow from his interest in himself. When you are a child your vessel is not yet full; so you care for nothing but your own affairs. When you grow up, your vessel overflows; and you are a politician, a philosopher, or an explorer and adventurer. In old age the vessel dries up: there is no overflow: you are a child again.”
—George Bernard Shaw (1856–1950)
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—Henry Brooks Adams (1838–1918)