For the Period 1926-2012,the Annual Return on Large-Company Stocks

question 88

Multiple Choice

For the period 1926-2012,the annual return on large-company stocks:

• A)was negative following every three-year period of positive returns.
• B)was only negative for two or more consecutive years during the Great Depression.
• C)remained negative for at least two consecutive years anytime that it was negative.
• D)never exceeded a positive 30 percent nor lost more than 20 percent.
• E)was unpredictable based on the prior year's performance.

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Definitions:

Contribution Margin Ratio

The contribution margin ratio is the percentage of each sales dollar remaining after deducting variable expenses, indicating how much of each dollar contributes to fixed expenses and profit.

Operating Leverage

An indicator of the way in which growth in revenue results in an increase in operating profit, revealing the ratio of fixed to variable expenses within a business.

Net Operating Income

The total profit of a company after operating expenses are deducted, but before taxes and interest payments.

Sales Increase

It refers to the upward change in the number of products sold or the value of sales over a specific period.