Long-Run Average Returns on Equity Investments

question 77

Multiple Choice

Long-run average returns on equity investments:

• A)are much higher than those on debt.
• B)are the same as the average returns on debt.
• C)are the same as the average returns on debt plus any dividends.
• D)are lower than those on debt.

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Definitions:

Immediate Pay-offs

Benefits or profits that are quickly realized after the implementation of an action or investment, as opposed to long-term gains.

Institutional Investors

Entities such as pension funds, insurance companies, and mutual funds that make large-scale investments in securities and other financial assets.

Analysts on Wall Street

Professionals who research and analyze financial data and trends to give investment advice or recommendations to clients or their employing financial institution.

Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs, typically considering economic, social, and environmental dimensions.