The market interest rate represents the true interest rate used by investors to value a company's bond issue.

Question

Quizplus · Accepted Answer

The market interest rate is the rate at which investors are willing to lend money, and it is used to determine the price of a company's bond issue. This rate reflects the current state of the economy, inflation, and other factors that affect the supply and demand for credit. Therefore, it is considered the true interest rate that reflects the market's perception of risk and return.

The Market Interest Rate Represents the True Interest Rate Used