required rate of return

  

Definition

Minimum acceptable rate of return on an investment proposal that is comparable with the rate of return obtainable effortlessly and at a low level of risk in the financial markets (such as on a time deposit in a bank).

Use this term in a sentence

  • The required rate of return was voiced by our investor so we had to ensure our financial project would be quite profitable.

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  • Our business is requesting the highest possible required rate of return because we are a small, growing business, that hopes to get the most out of our potential investments.

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  • Since the markets were particularly bad this past year, the required rate of return for our bank has risen significantly and we can no longer afford to take risky credit proposals.

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