David Recently Received an Inheritance, and He Is Planning to Invest

question 510

Multiple Choice

David recently received an inheritance, and he is planning to invest the inheritance in one of four stock portfolios. Which of these portfolios would you expect to have the highest risk?​

• A)​A portfolio with an average annual rate of return of 5%.
• B)​​A portfolio with an average annual rate of return of 8%.
• C)​​A portfolio with an average annual rate of return of 10%.
• D)​​A portfolio with an average annual rate of return of 14%.

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Definitions:

Oranges

A citrus fruit grown in warm climates, commonly consumed fresh, juiced, or used as flavoring in culinary dishes.

Absolute Advantage

The capacity of an entity to produce a good or service more efficiently than its competitors using the same amount of resources.

Comparative Advantage

A principle in economics that states a party's ability to produce a particular good or service at a lower opportunity cost than its trade partners, which can lead to beneficial trade.

Typing Reports

The act of creating written documents or records, typically using a keyboard or typewriter, which detail specific information or findings.