Which of the Following Statements About a Not-For-Profit Firm's Fund

question 9

Multiple Choice

Which of the following statements about a not-for-profit firm's fund capital is most correct?

• A) the sole source of fund capital is the excess of revenues over expenses.
• B) fund capital has a zero opportunity cost.
• C) fund capital can only come from donations.
• D) fund capital does not change over time.
• E) fund capital is equivalent to equity capital in investor-owned firms.

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Definitions:

Compounding

The process where the value of an investment increases because the earnings on an investment, both capital gains and interest, earn interest as time passes.

Return

The profit or loss derived from an investment over a certain period, expressed as a percentage of the investment's initial cost.

Concept

A general idea or understanding that is the foundation for further ideas, actions, or strategies.

Market's Volatility

The degree of variation of a trading price series over time, often measured by the standard deviation of returns.