Which of the Following Is Not a Component of the Required

question 44

Multiple Choice

Which of the following is not a component of the required rate of return?

• A) Expected rate of inflation
• B) Time value of money
• C) Risk
• D) Holding period return
• E) All of the above are components of the required rate of return

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Definitions:

Preexisting Duty

A promise to do something that one is already obligated to do. It is not considered valid consideration.

Unforeseen Circumstances

Events or situations that could not have been predicted and often cause a change in plans or necessitate a response.

Illusory Promise

An illusory promise is a statement that resembles a promise but does not actually commit the speaker to any action or obligation, making it unenforceable as a contract.

Preexisting Duty

An obligation that a party is already legally required to perform, which cannot serve as valid consideration for a new contract.