Interest Rates or Rates of Return on Investment That Have

question 332

Multiple Choice

Interest rates or rates of return on investment that have not been adjusted for the effects of inflation are called:

• A) Coupon rates.
• B) Stripped rates.
• C) Effective rates.
• D) Real rates.
• E) Nominal rates.

---

Definitions:

Service Revenue

Income earned by a company for the services it has provided to its customers.

Utilities Expense

Costs incurred by a business for basic services such as electricity, water, and gas, classified under operating expenses in the income statement.

Owner's Drawings

Funds taken out of a business by the owner in a sole proprietorship or partnership for individual purposes.

Capital Account

An account showing the net worth of a business at a specific point in time, comprised of the owner's equity, investments, and retained earnings.