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by ccarpenterg 5093 days ago
Interest rates are the price of capital

I think that's inaccurate. The price of the capital is its cost of opportunity. Interest rates are the price of debt.

2 comments

No, interest rates are both. All costs are opportunity costs, so it's just two ways of looking at the same coin.
Interest rate (ideally) = rate of inflation + the risk involved + cost of opportunity.