Interest Rates and Risk
Address all of the question prompts below. Support your responses with appropriate evidence from your course textbook and/or credible information from the Internet. Your paper should be 2 pages long, excluding the title page and references page.
Tasks:
Discuss how market interest rates are affected by borrowers’ need for capital, expected inflation, different securities’ risks, and securities’ liquidity.
Describe how risk aversion affects a stock’s required rate of return.
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