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What is the difference between the required rate of return and the expected rate of return in investment analysis?
The required rate of return is the minimum return an investor needs to justify the risk of an investment, while the expected rate of return is the return that an investor anticipates receiving based on their analysis of the investment's potential performance.
Difference between marginal efficiency of investment and marginal efficicency of capital?
MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
What is opportunity cost rate?
The opportunity cost rate is the rate of return you could earn on an alternative investment of similar risk.
Basic determinants of investment?
The immediate determinants of investment are: (a) the expected rate of return and (b) the real rate of interest.
How can one determine the expected rate of return for an investment?
To determine the expected rate of return for an investment, one can calculate the average annual return based on historical data, analyze the current market conditions and economic outlook, consider the risk associated with the investment, and use financial models such as the Capital Asset Pricing Model (CAPM) or the Dividend Discount Model (DDM).
What is the difference between the required rate of return and the expected rate of return in investment analysis?
The required rate of return is the minimum return an investor needs to justify the risk of an investment, while the expected rate of return is the return that an investor anticipates receiving based on their analysis of the investment's potential performance.
Difference between marginal efficiency of investment and marginal efficicency of capital?
MEC is the expected rate of return on capital and MEI is the expected rate of return on investment.
How is expected rate of return calculated from average rate of return on investment and standard deviation?
The expected rate of return is simply the average rate of return. The standard deviation does not directly affect the expected rate of return, only the reliability of that estimate.
What is opportunity cost rate?
The opportunity cost rate is the rate of return you could earn on an alternative investment of similar risk.
Basic determinants of investment?
The immediate determinants of investment are: (a) the expected rate of return and (b) the real rate of interest.
What is the expected rate of return on an investment when you are informed that the price of this investment is actually 3.000.000?
The rate of return (ROI) of an investment depends on many factors including: other costs relating to the use or production of the investment, duration of time held, income produced by the investment, etc.
How do you calculate r-r ratio?
The R-R ratio, often used in finance, is calculated by dividing the risk premium of an investment by its expected return. First, determine the risk-free rate (such as the yield on government bonds) and the expected return of the investment. Subtract the risk-free rate from the expected return to find the risk premium. Finally, divide the risk premium by the expected return to obtain the R-R ratio.
How can one determine the expected rate of return for an investment?
To determine the expected rate of return for an investment, one can calculate the average annual return based on historical data, analyze the current market conditions and economic outlook, consider the risk associated with the investment, and use financial models such as the Capital Asset Pricing Model (CAPM) or the Dividend Discount Model (DDM).
How can you calculate internal rate of return on investment in real estat?
common stock current price $90 is expected to pay a dividend of $10. Company growth rate is 11%. estimate the expected rate of return on corp stock common stock current price $90 is expected to pay a dividend of $10. Company growth rate is 11%. estimate the expected rate of return on corp stock
What are the three basic factors that influence the required rate of return for an investor?
The three basic factors that influence the required rate of return for an investor are the risk-free rate of return, the expected return from the investment, and the risk premium associated with the investment. Investors typically demand a higher rate of return for riskier investments.
How can one determine the required rate of return for an investment?
The required rate of return for an investment can be determined by considering factors such as the risk level of the investment, the current market interest rates, and the investor's own financial goals and risk tolerance. This rate is typically calculated based on the expected return needed to compensate for the risk taken on by investing in a particular asset.
Relation between marginal efficiency of capital and marginal efficiency of investment?
MEC is the highest rate of return expected from an additional unit of capital stock over its cost. MEI is the expected rate of return from one additional unit of investmeni.
