The Market Portfolio of Common Stocks Earned 20

question 21

Multiple Choice

The market portfolio of common stocks earned 20.4% last year. Treasury bills earned 5.3% on average last year. The average inflation rate was 2.5%. What was the real return on T-Bills?

• A) 2.8%.
• B) 5.3%
• C) 7.8%
• D) 3.9%

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Definitions:

Stem Cells

Undifferentiated cells capable of giving rise to indefinitely more cells of the same type, and from which certain other kinds of cells arise by differentiation.

Negative-Feedback

A process in which increases in output lead to future decreases in the same output, stabilizing systems against fluctuations.

Aldosterone

A substance generated by the adrenal glands that plays a role in regulating blood pressure through managing the balance of sodium and water in the body.

Hypogastric Region

The lower central part of the abdomen located below the umbilical region.