Overall Return Concept
The overall
return is basically is combination of risk free return and risk premium.
Investor will determine the return by taking into account of aforesaid return.
Risk Free Return – Secured return which carry no risk (Government bonds)
Risk Premium-
Return offer above the risk free return
Investor want to avoid risk may invest in only risk free
securities and investor who are interested more than return they may opt for
other investment option where overall return is more than risk free return i.e.
stock exchange, different projects.
