The internal rate of return is also known as the investment of investor's yield and can be defined by all of the choices. It represents a return on investment expressed as a compound rate of interest and is calculated by setting the price of an investment equal to the stream of cash flows it generates and solving for the interest rate. What is the internal rate of return?
1) A return on investment expressed as a compound rate of interest
2) The investment of investor's yield
3) The price of an investment equal to the stream of cash flows it generates
4) The interest rate