Respuesta :
An investor believes that interest rates will be flat or falling into the future; and that prices may deflate. the most appropriate investment is " Long term U.S. Government bonds".
What is interest rate?
The interest rate refers to the amount charged by the lender to the borrower in addition to the principal amount.
Some key features regarding the interest rates are-
- In words of the receivers, a person that deposits money in any financial institution or bank gains extra money due to the value of money, which is referred to as interest accrued by the depositor.
- Interest rates for borrowings & deposits may vary depending on the purpose and recipient of the funds.
- Borrowing interest rates are fixed based on the kind of borrower or the credit rating linked with him.
- Assume the borrower has a poor credit history. In that circumstance, banks may decide not to lend money at all, or to charge exorbitant interest rates, or to retain double collateral security.
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