The Marginal Rate of Return for a Property Is

question 10

Multiple Choice

The marginal rate of return for a property is:

• A)The APR on an incremental amount of borrowing
• B)The expected holding period return earned when the investor purchases the property
• C)The return earned on subprime property relative to prime property
• D)The return gained by holding the property for one additional year

---

Definitions:

Underlying Asset

An asset such as a stock, bond, commodity, or currency on which a derivative's price is based.

Exercise Price

The price at which the holder of an options contract may buy or sell the underlying security, also known as the strike price.

Quanto

A type of derivative in which the underlying is denominated in one currency, but the instrument itself is settled in another currency at a fixed rate.

Foreign Currency

Currency used in a country other than one’s own, involving the exchange of currencies in international trade or investment.