The minimum rate of return necessary to attract an investor to purchase or hold a security is referred to as the
A) stock's beta.
B) investor's risk premium.
C) investor's required rate of return.
D) risk-free rate.

Question

Quizplus · Accepted Answer

The minimum rate of return necessary to attract an investor to purchase or hold a security is referred to as the investor's required rate of return. This rate takes into account the investor's risk tolerance and expectation for return. It is different for each individual investor and is therefore not related to the stock's beta, the investor's risk premium, or the risk-free rate.

The Minimum Rate of Return Necessary to Attract an Investor