Required Rates of Return financial definition of Required Rates of Return. Required Rates of Return finance term by the Free Online Dictionary.

Required Rate of Return (RRR)

The minimum expected yield by investors require in order to select a particular investment.

Required Rate of Return

In securities, the minimum acceptable rate of return at a given level of risk. Different investors have different reasons for choosing their required returns. Normally, it is determined by a person's or institution's cost of capital. For example, an investor may also carry a debt with a high interest rate; if an investment does not meet a required rate of return, it would make more sense for the investor to pay down his/her debt. The required return is also related to the amount of risk an investor is willing to accept. One with a portfolio consisting largely of bonds will generally have a lower required return than one whose portfolio contains mainly stocks. See also: Markowitz Portfolio Theory.

required rate of return

1. The minimum rate of return that an investment must provide or must be expected to provide in order to justify its acquisition. For example, an investor who can earn an annual return of 11% on certificates of deposit may set a required rate of return of 15% on a more risky stock investment before considering a shift of funds into stock. An investment's required return is a function of the returns available on other investments and of the risk level inherent in a particular investment.

2. The minimum rate of return required by an investor, a stipulation that limits the types of investments the investor can undertake. For example, a person with a required rate of return of 15% would generally have to invest in relatively risky securities.

Required Rate of Return

What Does Required Rate of Return Mean?

The minimum rate of return needed to induce investors or companies to invest in something.

Investopedia explains Required Rate of Return

For example, if a person buys a stock, that person may desire a required rate of return of 10% per year. The investor's reasoning is that if he or she does not receive 10% return, he or she would be better off paying down an outstanding mortgage on which he or she is paying 10% interest.

Related Terms:
• Capital Asset Pricing Model—CAPM
• Discount Rate
• Expected Return
• Return on Assets—ROA
• Return on Investment—ROI

Mentioned in	?		References in periodicals archive	?		Financial browser	?		Full browser	?
Active Return Annual Return Asset Pricing Model Cost of Capital Cost of Equity Cutoff Point Dividend growth model Fisher Effect Gordon Growth Model Intrinsic value of a firm Market RRR Monetary Policy rate of return Required Return Return Return on Assets Sortino Ratio	To take account of differences in costs of capital, risk premia and required rates of return between developed and emerging markets, different ratings bands are applied in the Australia, United kingdom and South Africa respectively (as shown above). Pluton Resources Limited (ASX:PLV) 108mt of Waterfront Product Should ... by ABN Newswire Risk and health care The CAPM pricing equation provides the required rates of return on individual assets and portfolios. Risky business--health care finance and the VA by Bromley, Howard R. / Physician Executive Required rates of return for private companies are not as evident because they are not publicly traded, but it is presumed that--due to the illiquidity, lower levels of diversification and higher overall risk--equity in private companies merits annual returns well north of 25%. Terms to know: debt and equity capital by The Business Owner	Reporting Currency Reporting Dealer Reporting Dealers Reporting Level reporting requirements Reposicion de margen repossession Representations Representative Repricing Reprise sans emploi Reproducible Asset Reproducible Assets reproduction cost Repurchase repurchase agreement Repurchase of Stock Repurchase Price request for proposal request for qualifications Required Beginning Date Required Cash Required Insurance Required Minimum Distribution Required Rate of Return Required Rates of Return Required Reserves Required Return Required Yield Requisitos de capital Requisitos para cotizar en bolsa Rerun Res Res Ipsa Loquitur Res Judicata resale price resale proceeds Rescaled Range Rescaled Range Analysis Rescatable Rescatar Rescate Rescate financiero Rescate opcional Rescheduled Loan Rescheduled Loans Rescheduling of Debt rescind Rescindir rescission Research and Development	Required minimum distribution Required minimum distribution Required Minimum Distributions Required Minimum Margin Required Minimum Solvency Margin Required Minimum Withdrawal Required Monthly Repayment Amount Required Monthly Test Required Navigation Performance Required Navigation Performance Required Navigation Performance Area Navigation Required Navigation Performance Capability Required Navigational Performance Required Net Yield Required New Funds Required on Job Required on Station Required On-Site Required One-Time Required Operational Capability Required Operational Capability/Projected Operational Environment Required Operational Center Required Operational Date Required Operational Messaging Characteristic Required Physical Education Program Required rate of return Required rate of return Required rate of return Required rate of return Required Rates of Return required reading Required Reserve Required Reserve Rate Required Reserve Rates Required Reserve Ratio Required Reserve Ratios Required reserves Required Retail Price Required return Required Returns Required Risk Capital Required Risk Premium Required Run Rate Required Safe Egress Time Required Space Character Required Staff Training Required Supplemental Stewardship Information Required supplementary information required supply rate required supply rate required supply rate (ammunition) required surgery Required Task Capability required thickness Required Time of Arrival

Mentioned in

References in periodicals archive

Financial browser

Full browser

Active Return
Annual Return
Asset Pricing Model
Cost of Capital
Cost of Equity
Cutoff Point
Dividend growth model
Fisher Effect
Gordon Growth Model
Intrinsic value of a firm
Market RRR
Monetary Policy
rate of return
Required Return
Return
Return on Assets
Sortino Ratio

To take account of differences in costs of capital, risk premia and required rates of return between developed and emerging markets, different ratings bands are applied in the Australia, United kingdom and South Africa respectively (as shown above).

Pluton Resources Limited (ASX:PLV) 108mt of Waterfront Product Should ... by ABN Newswire

Risk and health care The CAPM pricing equation provides the required rates of return on individual assets and portfolios.

Risky business--health care finance and the VA by Bromley, Howard R. / Physician Executive

Required rates of return for private companies are not as evident because they are not publicly traded, but it is presumed that--due to the illiquidity, lower levels of diversification and higher overall risk--equity in private companies merits annual returns well north of 25%.

Terms to know: debt and equity capital by The Business Owner

Required minimum distribution
Required minimum distribution
Required Minimum Distributions
Required Minimum Margin
Required Minimum Solvency Margin
Required Minimum Withdrawal
Required Monthly Repayment Amount
Required Monthly Test
Required Navigation Performance
Required Navigation Performance
Required Navigation Performance Area Navigation
Required Navigation Performance Capability
Required Navigational Performance
Required Net Yield
Required New Funds
Required on Job
Required on Station
Required On-Site
Required One-Time
Required Operational Capability
Required Operational Capability/Projected Operational Environment
Required Operational Center
Required Operational Date
Required Operational Messaging Characteristic
Required Physical Education Program
Required rate of return
Required rate of return
Required rate of return
Required rate of return

Required Rates of Return

required reading
Required Reserve
Required Reserve Rate
Required Reserve Rates
Required Reserve Ratio
Required Reserve Ratios
Required reserves
Required Retail Price
Required return
Required Returns
Required Risk Capital
Required Risk Premium
Required Run Rate
Required Safe Egress Time
Required Space Character
Required Staff Training
Required Supplemental Stewardship Information
Required supplementary information
required supply rate
required supply rate
required supply rate (ammunition)
required surgery
Required Task Capability
required thickness
Required Time of Arrival

Required Rate of Return (redirected from Required Rates of Return)

Required Rate of Return
(redirected from Required Rates of Return)