Since 1802, the Average Annual Compound Return for Stock Holdings

question 190

Multiple Choice

Since 1802, the average annual compound return for stock holdings, adjusted for inflation, has been approximately

• A) 2 percent.
• B) 7 percent.
• C) 15 percent.
• D) 30 percent.

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Definitions:

Salvage Value

An asset's expected selling price once it has concluded its functional life.

Financially Attractive

Describes an investment, project, or acquisition that promises significant financial returns or benefits.

Discount Rate

This particular interest rate is utilized for assessing the present value of cash flows to be received in the future, as per discounted cash flow analysis.

Profitability Index

A financial tool used to evaluate the desirability of an investment, calculated as the present value of future cash flows divided by the initial investment cost.