The Potential Return on Any Investment Should

question 8

Multiple Choice

The potential return on any investment should

• A) Be directly related to the risk the investor assumes.
• B) Be inversely related to the risk of the investment.
• C) Not have any relationship to the risk of any investment.
• D) Be inversely related to the risk the investor assumes.
• E) Be guaranteed.

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Definitions:

Plant Size

Plant size refers to the capacity or physical dimensions of a facility where goods are produced, impacting the volume of production and potential economies of scale.

Diminishing Marginal Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase and may decrease.

Number of Workers

The total count of individuals engaged in the labor force of an organization, sector, or economy at any given time.

Units of Output

The quantity of product or service produced by a company, industry, or economic sector.