-The Value of an Investment at the End of Each

question 8

Multiple Choice

$\begin{array}{|c|c|}\hline \text { Year } & \begin{array}{c}\text { Return } \\\mathbf{( \% ) }\end{array} \\\hline \text { Year } 1 & 7 \% \\\hline \text { Year } 2 & 17 \% \\\hline \text { Year } 3 & -2.4 \% \\\hline \text { Year } 4 & 2 \% \\\hline\end{array}$
-The value of an investment at the end of each of four years is shown above.What is the arithmetic average return over the four years?

• A) \(-5.75 \%\)
• B) \(4.00 \%\)
• C) \(4.25 \%\)
• D)\(5.90\%\)

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Definitions:

Credit Histories

Records that document an individual's or company's past borrowing and repayments, used by lenders to evaluate creditworthiness.

High-Risk Borrowers

High-risk borrowers are individuals or entities considered to carry a greater likelihood of defaulting on loan repayments due to their poor credit history or unstable financial condition.

Interest Rates

The percentage of a sum of money charged for its use, influencing borrowing costs and the return on savings.

Imperfect Competition

A market structure where the conditions necessary for perfect competition are not met, characterized by numerous producers and free entry and exit but with different products.