Cutoff point

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Cutoff point

The lowest rate of return acceptable on investments.

Cutoff Point

The required rate of return needed to make an investment worth the expense. The cutoff point is subject and varies from investor to investor. However, in general, cutoff points vary by risk. That is, the cutoff point is almost higher for a riskier investment, meaning that the investor will not invest in a risky venture that is unlikely to have a high rate of return. Some investors adopt cutoff points as their personal investment policies, while others decide based on the situation.
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