What do you understand by a cut off rate to a stock issue?
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TRADING SKILLS & ESSENTIALS TRADING PSYCHOLOGY
Cutoff Point
REVIEWED BY WILL KENTON Updated Apr 26, 2018
What is Cutoff Point
The cutoff point is the point at which an investor decides whether or not a particular security is worth purchasing. The cutoff point is very subjective and will be based on the personal characteristics of the individual investor. Some examples of personal characteristics that may determine the cutoff point include the investor's required rate of return and his or her risk aversion level.
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cut-off rate. the minimum rate of return used in INVESTMENT APPRAISAL for the purpose of deciding if an investment project is to go ahead. A predetermined arbitrary cut-off rate may be used in place of the COST OF CAPITAL as the DISCOUNT RATE.