Investor Glossary-required rate of returnInvestor Glossary-required rate of returnInvestor Glossary-required rate of returnInvestor Glossary-required rate of returnInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Required Rate Of Return

The HTML to link to this page
 

The required rate of return is the minimum rate of return (expressed as a percentage) that an investor requires before investing capital. The degree of risk associated with an investment is reflected in the required rate of return. Investors and analysts often use the required rate of return as a discount rate for future cash flows from an investment. The required rate of return is also referred to as RRR, the "Magic Number" and the hurdle rate. For many investors, a beginning point in stock valuation is calculating the required rate of return. The Capital Asset Pricing Model (CAPM) is a method used in determining the required rate of return associated with an investment. On occasion, the required rate of return is confused with the internal rate of return.



Rate this required rate of return definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: inflation, deferred tax, ex-dividend date, 144a, class C shares, debt service coverage, balance sheet, command economy, stock split, reverse mortgage, wholly-owned subsidiary, average price per share, 1035 exchange, Key Rate Duration, margin rate, VIX, open position, covered put, annual return, per diem, required rate of return, retained earnings, irrevocable trust, risk management, LIBOR, deferred revenue, 401a, in escrow, EBITDA, diluted share, minority interest, FICO score, current ratio, quality assurance, implied volatility, FTSE, APR, dividends payable, labor relations, option premium, cancelled check, stock market close, phantom income, ex-dividend, liquidity ratio, limit order, 1031 exchange, real GDP, Zero Cost Collar


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use