You Invest $10,000 in August 2004

question 41

Multiple Choice

You invest $10,000 in August 2004.In August 2009,the investment is worth $12,000.What was your compound annual rate of return over the period?

• A) 3.09%
• B) 3.71%
• C) 4.00%
• D) 4.21%

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Definitions:

Social Exchange Theory

A theoretical perspective, based on the principle of reinforcement, that assumes that people will likely choose actions that maximize rewards and minimize costs.

Exchange Network

A social structure that consists of individuals or entities sharing resources and services through a system of transactions.

Group Polarization

In group decision making, the tendency for group members to shift their opinions toward a position that is similar to but more extreme than the positions they held prior to group discussion; both the risky shift and the cautious shift are instances of group polarization.

Risky Shift

In group decision making, the tendency for decisions made in groups after discussion to be riskier than decisions made by individual members prior to discussion.