The two elements that make up the risk-free rate of return are
A)the supply of funds and the demand for funds
B)the yield on 90-day Treasury bills plus an inflation premium
C)the real rate of return plus an inflation premium
D)the required return plus a risk premium

Question

Quizplus · Accepted Answer

The risk-free rate of return is typically composed of the real rate of return and an inflation premium, which accounts for the loss of purchasing power over time.

The Two Elements That Make Up the Risk-Free Rate of Return