What Explains the Level of Investment in Developing Countries

question 33

Multiple Choice

What explains the level of investment in developing countries?

• A)There are more opportunities to make profits in developing countries.
• B)There is a higher risk to investing in developing countries.
• C)Developing countries are farther away from the countries where investors live.
• D)Developing countries are close enough to the United States and Europe that investors can keep track of their assets.
• E)The large numbers of different languages spoken in developed countries make investment difficult.

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Definitions:

Total Rate of Return

The comprehensive yield on an investment over a specific period, considering both capital gains and dividends or interest, expressed as a percentage of the initial investment.

Dividend Growth Model

A valuation method that estimates the price of a company’s stock based on the dividend per share and the dividend growth rate.

Constant Rate

A fixed rate, without variation or fluctuation over time.

Dividends

Dividends are payments made by a corporation to its shareholder members, usually derived from the company's profits.