Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money or money earned by deposited funds. | CHAPTER TWO RETURN AND RISK 06 08 2011 1 RATE OF RETURN - Expected market return Rm Rf risk premium - Rate of Return on risky assets Re Rf B Rm - Rf 06 08 2011 2 INTEREST Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money or money earned by deposited funds. 06 08 2011
