One of the problems that investors face in determining required rates of return is forecasting errors involving interest rates and inflation.

Question

Quizplus · Accepted Answer

Forecasting errors are more pronounced in short-term returns than in long-term returns. Forecasting is always difficult because the past is never a completely accurate indicator of the future. There is no crystal ball. Forecasting the future is always risky, no matter what information is at hand.

One of the Problems That Investors Face in Determining Required