Investor Expectations About Expected Returns from Various Asset Classes Should

question 42

Multiple Choice

Investor expectations about expected returns from various asset classes should start with:

• A)historic rates of return of those asset classes,from sources such as Morningstar/Ibbotson & Associates.
• B)economic forecasts
• C)inflation.
• D)taxes.

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Definitions:

Marginal Product

The additional output that is produced by using one more unit of a particular input, holding all other inputs constant.

Number of Workers

The total count of individuals employed or available for employment within a business or economy.

Law of Diminishing Returns

The principle that as one factor of production is increased while others are held constant, the incremental gains in output will eventually decrease.

Marginal Output

The additional output that results from using one more unit of a particular input, holding all other inputs constant.