An Investor Is Faced with the Decision of Whether to Invest

question 51

Multiple Choice

An investor is faced with the decision of whether to invest in a stock with an expected return of 14% or a stock in the same industry with an expected 20% return.Which of the following seems most likely?

• A)the 20% stock is a better investment.
• B)the 14% stock is overpriced.
• C)Both stocks will have approximately the same return.
• D)Both stocks are priced correctly given their perceived risk.

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Definitions:

Importing Country

A country that buys goods and services from other countries for domestic consumption or use.

Tariff

A tax imposed by a government on goods and services imported from other countries, used to control trade volumes and protect domestic industries.

Oranges In South Africa

Refers specifically to the cultivation, production, and market dynamics of oranges within the South African context.

Tariff

A tax imposed by a government on goods and services imported from other countries, increasing the cost of imported goods and services.