The interest rate on money market loans defines the cost of borrowing in the money market, but there is no cost faced by a potential lender of funds in the money market.

Question

Quizplus · Accepted Answer

Lenders in the money market face opportunity costs, risks associated with the borrower's creditworthiness, and potential inflation impacts, which all contribute to the costs of lending in the money market.

The Interest Rate on Money Market Loans Defines the Cost