Inflation Risk Means That an Investment's Return Might Be Either

question 79

True/False

Inflation risk means that an investment's return might be either higher or lower than the inflation rate.

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Definitions:

Input

The resources used in the production process, such as labor, materials, and machinery.

Explicit Costs

These are direct payments made to others in the course of running a business, such as wages, rent, and materials.

Implicit Costs

Costs that represent potential benefits foregone when resources are not utilized in their next-best alternative use.

Economic Profit

The financial gain achieved when revenues from business activity exceed the explicit and implicit costs of that activity.