What factors influence the rates of return on an investment what factors influence the rates of return on an investment january 7, 2011 by: bonnie the changes the fed makes to the discount rate filter through the rest of the economy and affect everything from the rate you pay on your mortgage to the interest you earn on your cd and. Three factors that influence the required rate of return essays and research papers three factors that influence the required rate of return factors that influence exchange rates aside from factors such as interest rates and inflation, the exchange rate is one of the most important determinants of a country's relative level of economic health.
The required rate of return is influenced by the following factors: risk of the investment a company or investor may insist on a higher required rate of return for what is perceived to be a risky investment, or a lower return on a correspondingly lower-risk investment.
The big three economic indicators corporate earnings and news, political news, and general market sentiment can all move the market but economic factors have the most influence on long-term market performance and the rate of return you need to compensate for that erosion for example, if inflation is at 3% this year, and your.
3 factors that influence rate of return any bondholder, or any investor for that matter, will allow three factors to influence his or her required rate of return the three factors are the following: real (pure) rate of return, inflation, and risk premium. Factors that determine a currency’s value essay sample in the following this paper examines several factors that influence a currency’s value factors that determine a currency’s value in the following it will be analyzed how relative interest rates affect a currency’s value relative interest rate affects the international.
Home free essays net present value vs internal rate of return net present value vs internal rate of return essay a+ we will write a custom essay sample on net present value vs internal rate of return specifically for you for only $1638 $139/page 3 factors that influence the rate of return. It is important, however, to understand the various factors that can affect the return not only on your investments but the investments of others as well a number of outside influences can alter the returns on stocks and bonds and even on fixed income investments like cds and savings accounts. The required rate of return is the minimum return an investor expects to achieve by investing in a project an investor typically sets the required rate of return by adding a risk premium to the interest percentage that could be gained by investing excess funds in a risk-free investment the required rate of return is influenced by the following factors. These three factors equal the risk free rate which is the rate of return of an investment with no risk of financial loss this is also the rate that investors would expect from an absolutely risk-free investment over a period of time.
Various factors that affect the required rate of return by chirantan basu - updated september 26, 2017 the required rate of return is the minimum that a project or investment must earn before company management approves the necessary funds or renews funding for an existing project.
When interest rates fall, bond prices rise example – you own a bond paying 3% interest when interest rates are low – say 1% – your interest rate interest rate a fee you pay to borrow money or, a fee you get to lend it often shown as an annual percentage rate, like 5% examples: if you get a loan, you pay interest.