An Investment's Total Return Is the Sum of Any Cash

question 56

True/False

An investment's total return is the sum of any cash distributions minus the change in the investment's value, divided by the beginning-of-period value.

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Definitions:

Risk-Averse

A preference for guaranteed outcomes over gambles, even if the gamble might have a higher expected return due to the dislike of uncertainty.

Risk-Neutral

An attitude towards risk wherein the decision-maker is indifferent between different alternatives with the same expected return, disregarding the level of risk associated with each.

Risk-Loving

Describes individuals or entities that have a preference for taking on risk, often in anticipation of higher returns.

Expected Utility

A theory in economics that predicts the choices individuals will make by considering the risks and benefits of their options and selecting the one which offers the most utility.