An investment requires a total return that comprises:
A)a real rate of return and compensation for inflation.
B)a real rate of return, compensation for inflation, and a risk premium.
C)compensation for inflation and a risk premium.
D)a real rate of return, compensation for inflation, a risk premium, and compensation for time and effort devoted to researching alternative investments.
E)None of the above

Question

Quizplus · Accepted Answer

The total return is also called the required rate of return and is composed of the real rate of return, the anticipated inflation factor (compensation for inflation), and the risk premium.

An Investment Requires a Total Return That Comprises