If an Investment Earns 12% Annually

question 7

Multiple Choice

If an investment earns 12% annually,

• A) an equivalent monthly investment would have to earn a higher equivalent nominal rate to yield the same return.
• B) an equivalent monthly investment would have to earn a lower equivalent nominal rate to yield the same return.
• C) an equivalent monthly investment would have to earn the same equivalent nominal rate to yield the same return.
• D) a relation cannot be determined between a monthly and annual investment.

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Definitions:

Total Product

The total output or production by a company during a specific period of time.

Average Product

Average Product is the output per unit of input, calculated by dividing total product by the quantity of the input.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, while holding other inputs constant.

Average Product

In economics, the output produced per unit of input, used to measure productivity efficiency.