Which of the Following Correctly Completes This Sentence: When Calculating

question 37

Multiple Choice

Which of the following correctly completes this sentence: When calculating your return on investment you should ignore _____________.

• A) paper gains which you could have obtained by cashing out
• B) losses you avoided by not buying a stock that has since decreased in price
• C) dividends that have been declared on the stock you own if you have not yet received the dividend
• D) paper capital losses that occur
• E) fees you are charged in the process of purchasing the asset in question

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Definitions:

Consumer Behavior

The study of how individuals or groups select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Clear Preferences

The concept in decision theory and economics where consumers or decision-makers have well-defined preferences, allowing for consistent choices among sets of alternatives.

Budget Constraints

Constraints that consumers face as a result of limited incomes.

Endowment Effect

Tendency of individuals to value an item more when they own it than when they do not.