In Recessions, the Average Real Return to the Stock Market

question 23

Multiple Choice

In recessions, the average real return to the stock market is often

• A)negative.
• B)between 0% to 5%.
• C)between 5% to 10%.
• D)between 10% to 20%.

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Definitions:

Compounded Semiannually

The calculation of interest where the interest earned over a period is added to the principal, and the process is repeated twice a year.

Gross Debt Service Ratio

A financial ratio that compares an individual's monthly housing costs (including mortgage payments, property taxes, and utilities) to their gross monthly income, used by lenders to assess borrowing capacity.

Gross Monthly Income

The total amount of income earned in a month before taxes and deductions.

Compounded Monthly

Interest or returns on an investment are calculated and added to the principal amount every month.