During the Last Sixty Years, the Broad Stock Market (Standard

question 201

Multiple Choice

During the last sixty years, the broad stock market (Standard and Poor's 500 Index) yielded an average annual nominal rate of return of approximately ____ and real rate of return of approximately ____.

• A) 5 percent; 2 percent
• B) 10 percent; 7 percent
• C) 17 percent; 9 percent
• D) 9 percent; 17 percent

---

Definitions:

Revenue Test

A method to evaluate the viability or success of a business based on its ability to generate income.

Profit Test

An examination to determine the viability and profitability of a project, product, or business scenario.

Asset Test

A measure to determine a company's ability to quickly convert its assets into cash to cover short-term liabilities.

GAAP

A set of accounting standards and practices that are adhered to by companies to ensure consistency, reliability, and comparability of financial statements.