Which of the Following Should Require the Highest Rate of Return

question 137

Multiple Choice

Which of the following should require the highest rate of return?

• A) 90 day Certificate of deposit
• B) Money market that can be liquidated at anytime
• C) 120 day Treasury bill
• D) Accounts receivable usually collected in 30 days

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Definitions:

Price

The amount of money required to purchase a good or service, often determined by supply and demand dynamics in the market.

Income Elasticity

A measure of how much the demand for a good or service changes in response to changes in consumers' income.

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression, often indicating proportionality.

Normal Good

A good for which demand increases as consumer income rises, and decreases as consumer income falls.