You Invested $1,000 for Five Years in an Account That

question 61

Multiple Choice

You invested $1,000 for five years in an account that earns 5 percent. However, today you learn that you are able to move the account into an investment that earns 10 percent. Which of the following statements is correct?

• A) If you select the investment earning 10 percent, you will double your profit.
• B) If you select the investment earning 10 percent, you will more than double your profit.
• C) If you select the investment earning 10 percent, your profit will be less than double.
• D) None of the statements is correct.

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Definitions:

Administered Prices

Prices that are set by the company rather than determined by market demand and supply conditions; often found in less competitive markets.

Cartel

An association of independent businesses or countries agreeing to coordinate their production and pricing to monopolize a market or maximize profits.

Cutthroat Competition

Cutthroat competition describes an extremely competitive market situation where participants engage in aggressive price-cutting and other practices to gain market share.

Collusion

A secret or illegal cooperation or conspiracy, especially between parties to deceive or defraud others.