A Friend Informs You That She Is Planning to Purchase

question 16

Multiple Choice

A friend informs you that she is planning to purchase a water softener. Which of the following statements would be most appropriate for you to make to your friend?

• A) Hard water makes more bubbles with less soap than soft water and is more desirable.
• B) Soft water leaves a ring in the tub and a gray residue in the wash, which are undesirable.
• C) Soft water appears to aggravate hypertension and heart disease, which is undesirable.
• D) Soft water has higher concentrations of calcium and magnesium than hard water, which is desirable.

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Definitions:

Time-Weighted Return

A method to measure the rate of return of an investment portfolio which eliminates the distorting effects of inflows and outflows of money.

Dividend

Dividend represents the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Share

A unit of ownership in a company or financial asset, often traded on a stock exchange.

Arithmetic Average Return

The simple average of a series of returns over a period of time, calculated by summing the returns and dividing by the number of periods.