The Paragraph Below Is Developed by a Specific Mode or Pattern

question 49

Multiple Choice

The paragraph below is developed by a specific mode or pattern. Read the paragraph; then answer the question(s) .
(1) Investors should be familiar with three common kinds of investments. (2) The first kind of investment is called a certificate of deposit, or CD. (3) It is the investment option with the least risk. (4) A CD loans your money to your bank for a specific period of time, during which your money collects interest. (5) The second type of investment is a bond, a slightly less conservative way to invest money. (6) With a bond, you invest your money in a business or in the government, which treats your investment as a loan. (7) The third, and riskiest, type of investment of all is in stock. (8) If you buy stock in a company, it means that you own a part of that company, however small. (9) Your fortune will rise and fall with the profits and failures of the company. (10) Each investment option has advantages and disadvantages. (11) It is best to research all options before making your choice.
Select the type of development the writer of this paragraph has used.

• A) illustration
• B) narration
• C) description
• D) process
• E) definition
• F) comparison/contrast
• G) classification
• H) cause/effect

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Definitions:

Capital Structure

The mix of different forms of external funds used by a firm to finance its activities, including debt and equity.

ROE

Return on Equity (ROE) is a financial ratio that measures the profitability of a company relative to shareholder equity.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations, calculated as earnings before interest and taxes divided by interest expense.

Financial Statements

Documents detailing a company's financial performance, including balance sheets, income statements, and cash flow statements.