The required rate of return is payment given to the investor for forgoing present consumption.

Name: The required rate of return is payment given to the investor for forgoing present consumption.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The required rate of return compensates the investor for the opportunity cost of investing their money instead of spending it immediately. This is essentially the payment given to the investor for forgoing present consumption. Therefore, the statement is true.

The Required Rate of Return Is Payment Given to the Investor