Final answer:
The 'real hurdle rate of return' commonly refers to the 'required rate of return,' which includes consideration of the risks involved and the minimum return needed to justify an investment.
Step-by-step explanation:
The formula for the real hurdle rate of return (R) is not explicitly provided among the options A, B, C, and D. The term typically refers to the required rate of return, which is a rate that an investor expects to receive from an investment to compensate for the risk of the investment.
Expected rate of return is the average return a project or investment is projected to generate, measured as a percentage. Risk encompasses the uncertainty surrounding the investment's profitability, with types including default risk and interest rate risk. Finally, the actual rate of return is the total return realized on an investment at the end of the period, which includes capital gains and interest.
In the given context, the closest option to the 'real hurdle rate of return' would be the Required Rate of Return (Option D), as it includes the consideration of risk and the minimum return needed to justify an investment.