What Has Been the Average Annual Nominal Rate of Return

question 54

Multiple Choice

What has been the average annual nominal rate of return on a portfolio of U.S.common stocks over the past 111 years (from 1900 to 2011) ?

• A)Less than 2%
• B)Between 2% and 5%
• C)Between 5% and 11%
• D)Greater than 11%

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Definitions:

Average Total Cost

The total cost of production divided by the number of goods produced, indicating the per unit cost of production.

Marginal Cost

The cost of producing one additional unit of a good or service.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good changes as the production level varies.

Total Variable Costs

The total of all costs that vary with the level of output, including costs for raw materials, labor, and energy, in the production process.