Which of the Following Statements Is True of Investment Returns

question 84

Multiple Choice

Which of the following statements is true of investment returns?

• A) A change in the price of the underlying asset usually has no impact on returns to investment.
• B) Income yield always accounts for the bulk of the returns from an investment.
• C) The higher the price of the asset during the time of purchase, the lower the returns from that investment.
• D) The higher the income yield, the lower the overall returns from that investment.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or business activity, such as rent, salaries, and utility charges.

Marginal Cost

The charge for the production of one additional unit of a product or service.

Average Total Cost

The aggregate expense of manufacturing, including both fixed and variable costs, divided by the total number of units produced.

Marginal Cost

The price associated with manufacturing one more unit of a product or service.