The interest rate used to find the present value of a financial security is the
A)expected rate of return.
B)required rate of return.
C)realized rate of return.
D)realized yield to maturity.
E)current yield.

Question

Quizplus · Accepted Answer

The required rate of return is the minimum rate of return that an investor expects to earn when investing in a financial security. It is used as the discount rate in calculating the present value of the security. This rate is based on factors such as the risk of the investment, inflation, and the opportunity cost of investing in other securities.

The Interest Rate Used to Find the Present Value of a Financial