The appropriate discount rate that analysts use in computing the present value of future cash flows is composed of a pure interest rate,a premium for the risk of the investment,an increase to reflect expected inflation.What is this rate is called?

Question

Quizplus · Accepted Answer

The appropriate discount rate that includes a pure interest rate, a premium for the risk of the investment, and an adjustment for expected inflation is called the nominal interest rate. This rate reflects the total return that investors expect from an investment, considering the time value of money, the risk of the investment, and the impact of inflation.

The Appropriate Discount Rate That Analysts Use in Computing the Present