What is the required rate of return？

The required rate of return is the minimum return that an investor expects to earn from an investment in order to compensate them for the risk they are taking. It is also known as the hurdle rate or the discount rate. The required rate of return varies depending on factors such as the riskiness of the investment, the investor's opportunity cost, and the prevailing market conditions. It is typically used to evaluate the potential profitability of an investment and to determine whether it is worth investing in.