Which of the following statements about the required rate of return is false? The required rate of return is:
A) also known as the discount rate.
B) the sum of the risk-free rate and the market's rate of return.
C) the minimum return expected relative to the risk of a security.
D) the sum of the risk-free rate of return and the risk premium.

Question

Quizplus · Accepted Answer

The required rate of return is not the sum of the risk-free rate and the market's rate of return. It is calculated as the sum of the risk-free rate of return and the risk premium, which accounts for the risk associated with the investment relative to the risk-free rate.

Which of the Following Statements About the Required Rate of Return