Which of the Following Is Approximately True When Size Is

question 11

Multiple Choice

Which of the following is approximately true when size is measured in terms of the underlying principal amounts or value of the underlying assets

• A) The exchange-traded market is twice as big as the over-the-counter market.
• B) The over-the-counter market is twice as big as the exchange-traded market.
• C) The exchange-traded market is ten times as big as the over-the-counter market.
• D) The over-the-counter market is ten times as big as the exchange-traded market.

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Definitions:

Crossover Rate

The point at which two or more investment projects have the same net present value or rate of return, used in capital budgeting to compare projects.

Mutually Exclusive

Refers to a situation where the selection of one alternative prevents the selection of any other alternative.

Required Rate

The minimum return an investor expects to achieve on an investment, taking into account its risk.

Average Accounting Rate of Return

A financial ratio indicating the expected return on an investment, calculated by dividing the average profit by the initial investment cost.