You Are Certain That a Normal Rate of Return Is

question 278

Multiple Choice

You are certain that a normal rate of return is 18% for the computer industry. What do you expect for a normal rate of return in the computer software industry, which is considered to be much riskier than the computer industry?

• A) 18%
• B) Less than 18%
• C) Above 18%
• D) The rate on government bonds

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Definitions:

Preauthorized Payments

Financial transactions that are set up in advance to regularly move funds from one account to another, commonly used for recurring bills and subscriptions.

Magnetic Ink Character Recognition

A technology used to verify the legitimacy and facilitate the processing of checks and other documents, employing magnetic ink.

Special Ink

A unique form of ink used for specific purposes, such as security printing to prevent forgery or duplicity.

Legitimacy

Pertains to the lawfulness or authenticity of something, often referring to the power or authority being recognized as just and rightful.