Carl Reimer Has Just Received an Inheritance of $25,000 from His

question 59

Multiple Choice

Carl Reimer has just received an inheritance of $25,000 from his mother and is trying to decide how to invest it.Carl is young and earns a good salary.Carl wants to invest in a small cap mutual fund.While he won't receive much in the way of cash dividends,the companies are reinvesting significant amounts so the sales revenue and earnings in the future will be much larger.What aspect of investing is Carl most concerned about?

• A)Market risk
• B)Rate of return
• C)Diversification
• D)Liquidity
• E)Investment growth

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Definitions:

Monopolistically Competitive

A business environment where multiple organizations supply items that resemble each other but are not exact copies, enabling them to have some market dominance.

Marginal Revenue

The additional income from selling one more unit of a good; sometimes equal to price.

Marginal Cost

The extra charge incurred when making one more unit of a good or service.

Marginal Revenue

The additional income received from selling one more unit of a product.