The market rate of interest is the interest rate that investors demand to lend their capital. Debenture bonds are bonds that are only guaranteed by the borrower's good faith.
What do you understand by market rate of interest?
The market rate, also known as the interest rate on a loan or investment that is typically offered on the market for that product, defined the cost and benefit of the tool. The market rate for a loan is the typical interest rate that the recipient will be assessed by a range of lenders.
What is market rate of interest for bonds?
The market value of a bond's existing issue falls as market interest rates rise. An existing bond's market value rises as interest rates on the open market decline. The term "inverse relationship" refers to the connection between market interest rates and bond market value.
Learn more about market rate of interest: https://brainly.com/question/13084327
#SPJ4
