If the Dow Jones Industrials Had a Price Appreciation of 6

question 50

Multiple Choice

If the Dow Jones Industrials had a price appreciation of 6 percent one year and yet total return for the year was 9 percent, the difference would be due to:

• A) the tax treatment of capital gains.
• B) the cumulative wealth effect.
• C) dividends.
• D) inflation.

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Definitions:

Fixed Cost

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Variable

An element, feature, or factor that is liable to vary or change, often used in the context of experiments or mathematical models.

Output

The total amount of goods and services produced by an economy, company, or sector.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output produced, representing the variable cost per unit of output.