Interest rate that investors receive on financial security to calculate fair value of security is classified as

A. forward rate of return

B. unturned rate of return

C. required rate of return

D. termed rate of return

Answer: Option C

Solution(By Examveda Team)

Interest rate that investors receive on financial security to calculate fair value of security is classified as required rate of return. The required rate of return is the minimum return an investor expects to achieve by investing in a project. An investor typically sets the required rate of return by adding a risk premium to the interest percentage that could be gained by investing excess funds in a risk-free investment.