Which of the Following Is Indicated by the Data on Real

question 17

Multiple Choice

Which of the following is indicated by the data on real income per person for various countries over the past 100 or so years?

• A)If,in a relatively poor country,real income per person had grown by 3.5 percent per year for the last 100 years,it would be a relatively rich country today.
• B)Rich countries became richer and poor countries became poorer.
• C)In the United States,real income per person today is about four times as high as it was 120 years ago.
• D)All of the above are correct.

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, often used in finance to gauge the volatility of an investment's return.

Monthly Excess Returns

Returns from an investment over and above the risk-free rate of return on a monthly basis, used to evaluate investment performance.

Nondiversified Investor

An investor who concentrates their investment in a limited selection of assets, increasing risk compared to diversified strategies.

Expected Excess Return

The return expected on an investment over and above the risk-free rate, taking into account both the risk involved and the time value of money.