4 ms·
The primary value of interest is in exchange for the time value of money, the opportunity cost of not being able to use it elsewhere. That remains even if risk
by hirundo 4y ago
The primary value of interest is in exchange for the time value of money, the opportunity cost of not being able to use it elsewhere. That remains even if risk reaches zero. If we loan it to Alice, we can't loan it to Bob. Interest is the price that Alice pays for that.