Over the Past 100 Years, the Rate of Return on Stocks

question 306

Multiple Choice

Over the past 100 years, the rate of return on stocks has averaged about _____, and the return on bonds has averaged approximately _____.

• A) 20%; 25%
• B) 1%; 2%
• C) -10%; 5%
• D) 7%; 2%

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Definitions:

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues and expenses.

Margin of Safety Percentage

The difference between actual sales and break-even sales, expressed as a percentage of actual sales.

Contribution Format

An income statement format that distinguishes between fixed and variable costs, highlighting the contribution margin.

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income.