Estimations Calculated Using the Rule of 70

question 71

Multiple Choice

Estimations calculated using the rule of 70:

• A) make it easier to appreciate how small differences in growth rates can add up to huge differences in income over time.
• B) make it easier to appreciate how big differences in growth rates are needed to create any real difference in income over time.
• C) are simple to use, but make it difficult to see the relationship between growth rate and income over time.
• D) are simple to use, but give estimates that have been proven wrong in recent decades.

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Definitions:

GAAP

Generally Accepted Accounting Principles; a collection of commonly followed accounting rules and standards for financial reporting in the United States.

FASB

The Financial Accounting Standards Board, which is responsible for establishing and improving standards of financial accounting and reporting for the private sector in the United States.

Higher Risk Securities

Investment products that offer potentially higher returns but come with an increased level of risk, including stocks or bonds from less stable companies.

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The global market in which currencies are traded. This market determines the foreign exchange rates for every currency.