Mutual Funds Often Report Returns as the Growth of $10,000

question 104

Multiple Choice

Mutual funds often report returns as the growth of $10,000 over a period of time. These returns assume that

• A) all dividends and capital gains are reinvested.
• B) all dividends and capital gains are withdrawn.
• C) all dividends and capital gains are reinvested after deductions for income taxes.
• D) the investor contributes money to the fund on a regular basis through an automatic investment plan.

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Definitions:

Autarky Price

The price of goods or services within a self-sufficient economy that does not engage in international trade.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, representing extra benefit to producers.

International Trade

The exchange of goods, services, and capital between countries and territories, often driven by comparative advantages and specialization.

Comparative Advantage

A principle in international trade that suggests a country or entity should produce and export goods and services for which it has a lower opportunity cost compared to other countries or entities.