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:

Gross Domestic Product

The total market value of all final goods and services produced within a country in a given period, used as an indicator of economic health.

Health Care

Maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of illness, injury, and other physical and mental impairments in people.

Nations

Large groups of people bound together by common languages, territories, histories, and sometimes religions.

Impoverished

Describing a condition of limited financial resources, where basic needs such as food, clothing, and shelter may not be adequately met.