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.

Submission Details:

  • Use three or more scholarly sources to support your work.
  • Submit your paper in Microsoft Word, using APA style.