A Capital Investment That Generates a 10% Rate of Return

question 60

Multiple Choice

A capital investment that generates a 10% rate of return is worthwhile if:

• A) corporate bonds of similar risk offer 8% rates of return.
• B) corporate bonds of similar risk offer 10% rates of return.
• C) top-quality corporate bonds offer 10% rates of return.
• D) the expected rate of return on the stock market is 12%.

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Definitions:

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