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31 December, 12:12

Interest rates generally reflect

O the potential effects of inflation.

O the level of risk in an investment.

o the real value of the investment.

O the amount of money investa")

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Answers (1)
  1. 31 December, 12:36
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    the level of risk in an investment.

    Explanation:

    Risk is the probability of suffering injuries or incurring losses. Every investment posses some degree of risk to the investor. Interest rates are the rate of compensation that investment offers. Investments considered high risk attracts investors by offering high-interest rates.

    Interest rates represent the level of risk in an investment. Government bonds and treasuries bills are the safest forms of investment. It is believed that a government cannot default on payments. For a reason, government bonds offer lower interest rates compared to other investments.
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