Financial decision making for managers session 5 DQ
Q 1. Explain the difference between required rate of return and expected rate of return. If they are different at a specific point in time, what does it mean?
The required return rate can be regarded as the investor’s decided rate on the basis of their appetite of risk. There is change in rate from instruments to instruments and from investors to investors. For instance, investment made in a start-up is regarded by investor to be very risky and required return rate may be fixed at 35% - 50%. On the other hand, a
