Learning Outcome: Define a satisfactory investment. 4.3 What is a satisfactory investment? When the present value of benefits exceeds the cost of an investment, what is true of the rate of return earned by the investor relative to the discount rate? Learning Outcome: Explain the concept of yield. 4.6 Define yield (internal rate of return). When is it appropriate to use yield rather than the HPR to measure the return on an investment? Learning Outcome: Discuss the key sources of risk. 4.9 Define risk. Explain what we mean by the risk-return tradeoff. What happens to the required return as risk increases? Explain. Learning Outcome: Discuss the key sources of risk. 4.10 Define and briefly discuss each of the following sources of risk. a) Business risk b) Financial risk c) Purchasing power risk d) Interest rate risk e) Liquidity risk f) Market risk g) Event risk