The Return Measure That an Investor Demands for Giving Up

question 40

Multiple Choice

The return measure that an investor demands for giving up current use of funds,without adjusting for purchasing power changes,is the:

• A) risk premium.
• B) inflation premium.
• C) real rate of return.
• D) discount rate.

---

Definitions:

Revenues and Expenses

The income generated from normal business operations and the costs incurred to generate that income.

Income Statement

A financial statement that shows a company's revenues and expenses, resulting in net income or loss over a specific period.

Balance Sheet

A financial statement that shows a company's financial position at a specific point in time, detailing assets, liabilities, and shareholders' equity.

Statement of Cash Flows

A summary indicating how balance sheet account changes and revenue fluctuations impact cash and equivalents, broken down into the segments of operating, investing, and financing.