A Capital Investment That Generates a 10% Rate of Return

question 86

Multiple Choice

A capital investment that generates a 10% rate of return is worthwhile if:

• A) corporate bonds of similar risk offer 8% rates of return.
• B) corporate bonds of similar risk offer 11% rates of return.
• C) top-quality corporate bonds offer 10% rates of return.
• D) the expected rate of return on the stock market is 12%.

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Definitions:

Conditioned Stimulus

An initial neutral cue that, once linked with an unconditioned stimulus, gradually leads to a conditioned response.

Conditioned Response

A learned response to a previously neutral stimulus that has become conditioned by being paired with an unconditioned stimulus.

Habituation

A psychological learning process wherein there is a decrease in response to a stimulus after being repeatedly exposed to it.

Acquisition Behavior

A behavioral psychology term referring to the process of learning new behaviors, often through conditioning.