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Fair Rate of Return

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Fair rate of return
The rate of return that state governments allow a public utility to earn on its investments and expenditures. Utilities then use these profits to pay investors and provide service upgrades to their customers.

Fair Rate of Return
The profit that a government allows an industry to make if it deems that industry to be necessary for public function. A state may impose a fair rate of return on industries, such as utilities, to keep services affordable for consumers. Critics of this practice contend that this is economically inefficient and ultimately harms consumers, though this is a matter of considerable dispute.


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Credit card companies are entitled to a fair rate of return, but under the current rules they get that and more.
We pay pounds 45bn already in the UK and we don't get anywhere near a fair rate of return.
So, as a practical matter, insurers have substantial discretion to say what a fair rate of return is--and thus discretion to charge a rate high enough to produce that return.
 
 
 
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