Examveda
Examveda

Rate of required return to cover risk of investment in absence of inflation is classified as

A. real rate of return

B. required rate of return

C. nominal rate of return

D. none of above

Answer: Option A

Solution(By Examveda Team)

Rate of required return to cover risk of investment in absence of inflation is classified as real rate of return. A real rate of return is the annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external factors.

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