Which Would Be Considered an Investment According to Economists

question 176

Multiple Choice

Which would be considered an investment according to economists?

• A)the buying of shares of Janus mutual funds
• B)the purchase of a new machinery by Ford
• C)the purchase of stock of MacDonald's
• D)the selling of IBM corporate bonds

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Definitions:

Portfolio Return

The overall gain or loss of an investment portfolio, considering all sources of income and capital gains.

Single Factor APT

Arising from the Arbitrage Pricing Theory, this is an asset pricing model based on a single factor, typically the market return, to predict security returns.

Arbitrage Opportunities

Situations where a trader can profit from discrepancies in prices across different markets or instruments without risk.

Risk-Free Rate

The interest rate at which an investor can lend money with no risk of default, often represented by the yield on government bonds.