Which of the Following Statements Is Correct for an Investor

question 112

Multiple Choice

Which of the following statements is correct for an investor starting with $1,000 in common stocks over a 20-year investment horizon in which stocks averaged 11% in nominal terms and 4% in real terms? The portfolio value is now approximately:

• A) $1,800 in real terms.
• B) $3,679 in real terms.
• C) $3,870 in nominal terms.
• D) $8,062 in nominal terms.

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Definitions:

Operating Cash Flow

The cash generated from a company's regular business operations, indicating its ability to generate sufficient cash to maintain operations.

Accounting Break-even Point

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Fixed Cost

are business expenses that remain constant regardless of the level of production or sales, such as rent or salaries.