The S&P 500 Index Delivered a Return of 20%, -10

question 23

Multiple Choice

The S&P 500 index delivered a return of 20%, -10%, 20%, and 5% over four successive years. What is the arithmetic average annual return for four years?

• A) 10.50%
• B) 13.13%
• C) 8.75%
• D) 9.63%

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Definitions:

Short Run

A time period during which at least one input, such as plant size, is fixed and cannot be changed by the firm.

Average Total Cost Curve

A graphical representation showing the average total cost of producing various output levels, typically U-shaped due to economies and diseconomies of scale.

Total Cost

The aggregate cost involved in manufacturing goods or offering services, which covers both stable and changeable outlays.

Producing

The process of creating goods or services to be sold or used, involving various inputs to generate output.