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pentagon [3]
3 years ago
5

Interest rates generally reflect

Business
1 answer:
dem82 [27]3 years ago
5 0

Answer:

the level of risk in an investment

Explanation:

Interest rates show the percentage yield an investor will be gaining from undertaking a particular investment. All investments reward investors with regular returns that are expressed a percentage of the principal amount.  The higher the returns, the more attractive the investment.  Interest rates are the rewards or returns from an investment.

A high-interest rate is also indicative of the risk associated with the investment.  Generally, high-risk investments will offer a higher interest rate. Government bonds and treasury bills are the safest investment but offer lower interest rates. Corporate bonds are riskier but have high-interest rates.

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