The interest rate that investors demand in order to loan their money is known as the:

Question

Quizplus · Accepted Answer

The market interest rate is the rate at which investors are willing to loan their money, also known as the "going rate" or "current rate." This rate is influenced by various factors such as inflation, market conditions, and the perceived risk of the investment. Option A is incorrect as the yield to maturity is the total return anticipated on a bond if held until it matures. Option B is incorrect as the coupon rate is the fixed interest rate paid out by a bond, usually stated as a percentage of the bond's face value. Option C is incorrect as there is no term known as a differential rate.

The Interest Rate That Investors Demand in Order to Loan