The Possible Return on an Uncertain Investment Calculated by Weighting

question 188

True/False

The possible return on an uncertain investment calculated by weighting different outcomes by their respective probabilities is called the expected return.

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Definitions:

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated as net profit divided by the cost of the investment.

Benefit-cost Ratio

A financial ratio used to assess the economic value of an investment, comparing the benefits received from the investment to the costs associated with it.

Equipment Downtime

The period during which machinery or equipment is not operational due to maintenance, repairs, or malfunctions.

Product Quality

The measure of a product's ability to meet or exceed customer expectations in terms of durability, functionality, and reliability.