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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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nd held it until it matured, what annual rate of return would she have earned? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16
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