What is risk free rate of returnthere is a risk free rate, Ask an Expert

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What is risk free rate of return

There is a 'risk free rate of return' (also known as time preference rate) which is used to compensate for the loss of not being able to invest at any other place. To it a 'risk premium' is added to compensate for uncertainty of receiving the cash flows.

Required rate of return = Risk free rate + Risk premium

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M9581177

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