Risk-adjusted discount rate


The rate established by adding a expected risk premium to the risk-free rate in order to determine the present value of a risky investment.

Investing Essentials

Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Acid test ratio

Also called the quick ratio, the ratio of current assets minus inventories, accruals, and prepaid items to current liabilities.

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