Which of these factors influences the returns required by investors from an investment project?

Question

Quizplus · Accepted Answer

All of these factors influence the returns required by investors from an investment project. Interest foregone represents the opportunity cost of investing in the project rather than putting money in a risk-free investment such as a savings account; inflation erodes the purchasing power of returns, so investors demand higher returns to offset it; and the risk premium compensates investors for the additional risk they take on by investing in a particular project, relative to a risk-free investment.

Which of These Factors Influences the Returns Required by Investors