The Rate of Return on a Risk Free Asset Should

question 28

Multiple Choice

The rate of return on a risk free asset should equal the

• A) Long run real growth rate of the economy.
• B) Long run nominal growth rate of the economy.
• C) Short run real growth rate of the economy.
• D) Short run nominal growth rate of the economy.
• E) Prime rate of interest.

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Definitions:

Cost of Goods Sold

Cost of goods sold represents the direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Beginning Inventory

The value of goods available for sale at the start of an accounting period.

Income Statement

A financial report that shows a company's revenues, expenses, and profits over a specific period, often a fiscal quarter or year.

Financial Statements

Reports that summarize the financial performance and position of a business, including the balance sheet, income statement, and statement of cash flows.