Use the Table for the Question(s)below

question 15

Multiple Choice

Use the table for the question(s) below.
Consider the following average annual returns:
-What is the excess return for the portfolio of small stocks?

• A)10.0%
• B)15.7%
• C)18.4%
• D)17.0%

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Definitions:

Net Present Value

A financial measure that determines the net present value by subtracting the total outgoing cash flows from the incoming cash flows over a certain time period.

Telecommunications Equipment

Hardware used in the transmission, reception, and processing of data and communication signals.

Investment

The allocation of resources, such as time, money, or effort, in hope of generating a future return or profit.

Internal Rate

Often referred to as the internal rate of return (IRR), it is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.