An investment requires a total return that comprises

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Quizplus · Accepted Answer

A total return on an investment should include a real rate of return (to account for the time value of money), compensation for inflation (to account for the eroding effect of inflation on purchasing power), and a risk premium (to compensate for the risk of the investment). Therefore, option B is the best choice as it includes all three factors. Option D includes an additional factor of compensation for time and effort, but this is not a necessary component of a total return, and is specific to individual investors and their approach to investing.

An Investment Requires a Total Return That Comprises