Which of the Following Statements Is Correct

question 24

Multiple Choice

Which of the following statements is correct?

• A) The return indicates the percentage increase in the value of an investment per dollar initially invested in the security.
• B) The return indicates the average increase in the value of an investment per dollar initially invested in the security.
• C) The return indicates the weighted average increase in the value of an investment per dollar initially invested in the security.
• D) The return indicates the exponential increase in the value of an investment per dollar initially invested in the security.

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Definitions:

Countercyclical Stock

Shares of companies that tend to perform well during economic downturns because they offer goods or services that remain in demand.

Portfolio Weight

The percentage composition of a particular holding or investment relative to the total value of the portfolio.

Expected Return

The forecasted amount of profit or loss an investment is projected to generate, expressed as a percentage of the total invested capital.

Portfolio Weight

The percentage composition of a particular holding in relation to the total value of the portfolio, used to assess diversification and risk.