This is the fourth in a series of seven papers on interest rates and it covers the principle of interest rate discovery and security valuation, the micro structure of financial markets, the role of secondary markets, interest rate discovery in the debt and deposit markets, and the micro factors which impact on price discovery. The seven papers cover: (1) what are interest rates?; (2) relationship of interest rates; (3) composition of interest rates; (4) interest rate discovery; (5) bank liquidity & interest rate discovery; (6) role of interest rates; (7) an optimal rate of interest: the natural rate.