As the interest rate increases the opportunity cost of
The connection between interest rates and the cost of debt financing is easy to see. rates are rising, you'll pay more in interest, and your cost of capital rises. the cost of equity financing is not just opportunity cost -- it's the return those 21 Apr 2011 What Happens When the Fed increases the Supply of Money? Clearly, the opportunity cost of holding money is the rate of interest. If. interest rates and bank reserves to rise endogenously at the end of each based on the frequency of rate increases on settlement days (occurring in 70 percent where denotes the level and the opportunity cost of reserve holdings; indexes