Exhibit 19-2

question 39

Multiple Choice

Exhibit 19-2.Hugh Wallace has the following information regarding three investment options.Each investment option involves the same one-year period. Refer to Exhibit 19-2.What nominal rate of return will Hugh earn if he invested in option 1?

• A)0.79 percent
• B)3.22 percent
• C)0.32 percent
• D)6.67 percent

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Definitions:

Marginal Revenue

The change in total revenue generated by an additional unit of output.

Marginal Cost

The growth in aggregate costs linked to creating an extra unit of a product or service.

Pastry Chef

A professional cook specializing in the creation of desserts, pastries, breads, and other baked goods.

Average Product

The output per unit of input, calculated by dividing total output by the total quantity of input.