Choice "B" is correct. Credit risk relates to the ability of a firm to obtain, not grant, credit. Require rate of return adjustments do not include a credit risk adjustment.
Choice "d" is incorrect. Default risk premium (DRP) is an appropriate risk adjustment to the risk-free rate of return and is the additional compensation demanded by lenders for bearing the risk that the issuer of the security will fail to pay interest or fail to repay the principal.
Choice "c" is incorrect. Purchasing power risk premium, or inflation premium (IP), is an appropriate risk adjustment to the risk free-rate of return and is the compensation investors require to bear the risk that price levels may change and affect asset values or the purchasing power of invested dollars (e.g., real estate).
Choice "a" is incorrect. Maturity risk premium (MRP), or interest rate risk, is an appropriate risk adjustment to the risk-free rate of return and is the compensation investors demand for bearing risk. This risk increases with the term to maturity.