An Investor Who Has a Resource Constraint

question 40

Multiple Choice

An investor who has a resource constraint:

• A)pays no income taxes.
• B)has insufficient funds to purchase a security.
• C)has a relatively high marginal tax rate.
• D)has only one source of income.
• E)will only invest in socially acceptable securities.

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Definitions:

Infinite Number

A quantity without end or limit, often used in mathematics to describe sizes or quantities larger than any finite number.

Investment Decisions

The process of making choices about where to allocate resources and capital to generate returns.

Entrepreneurial Success

The achievement of desired goals and objectives by someone who undertakes the risk of starting a business.

Net Present Value

A financial metric used to appraise the profitability of an investment, calculating the difference between the present value of cash inflows and outflows over a period.