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15 July, 13:04

Which answer is not a cost to the investor that is included in the calculation of an investment's interest rate

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  1. 15 July, 13:17
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    Risk of a bad investment

    Explanation:

    When an investor is calculating an investment's interest rate, he/she must include all brokerage commissions and fees, inflation rate (interest rate must exceed the inflation rate) and the investor's opportunity cost.

    Investors are risk adverse, which means that a risky investment should yield a higher return. That could be considered a rational investment rule, but it is not included in the calculation of the interest rate.
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