The discount rate is commonly measured by the
A)stock market returns.
B)rate of inflation.
C)interest rate.
D)unemployment rate.
E)rate of economic growth.

Question

Quizplus · Accepted Answer

The discount rate refers to the interest rate used to determine the present value of future cash flows in a discounted cash flow analysis. Therefore, the commonly used measure for the discount rate is the interest rate. Choice A is incorrect because stock market returns are not directly related to the discount rate. Choice B is related to inflation but does not directly measure the discount rate. Choice D and E are also incorrect as they are not related to the discount rate.

The Discount Rate Is Commonly Measured by the