What Has Been the Average Annual Nominal Rate of Return

question 57

Multiple Choice

What has been the average annual nominal rate of return on a portfolio of U.S. common stocks over the past 107 years (from 1900 to 2006) ?

• A) Less than 2%
• B) Between 2% and 5%
• C) Between 5% and 11%
• D) Greater than 11%

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Definitions:

Luxury RV

A high-end recreational vehicle that offers premium amenities, sophisticated design, and superior comfort, targeting affluent travelers.

Complementary Products

Products whose demand curves are positively related, such that they rise or fall together; a percentage increase in demand for one results in a percentage increase in demand for the other.

Midwestern

Pertaining to the Midwestern region of the United States, often characterized by its geographical location, culture, or particular attributes of the area.

Substitution Effect

Refers to consumers’ ability to substitute other products for the focal brand, thus increasing the price elasticity of demand for the focal brand.