Investments Are Distinguished from Savings on the Basis of

question 40

Multiple Choice

Investments are distinguished from savings on the basis of

• A)length of time held.
• B)initial dollar outlay.
• C)depreciation.
• D)voting rights.
• E)level of risk and expected return.

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Definitions:

Interest Rates

The cost, represented as a portion of the principal, that a borrower must pay to a lender for borrowing assets.

Present Value

The contemporary value of money or cash flows due in the future, calculated with a designated rate of return.

Received

To have been given, accepted, or acknowledged something that is sent or provided.

Economic Rent

The excess payment made to a factor of production over and above what is needed to keep it in its current use.