Assume That an Investor Invests $100,000 in a Business Venture

question 25

Multiple Choice

Assume that an investor invests $100,000 in a business venture. He earns an economic profit of $5,000. If the rate of return on an investment of equal risk is 10%, then the rate of return earned on the investment in the business venture is:

• A) 25%
• B) 15%
• C) 10%
• D) 5%
• E) 20%

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Definitions:

Market Prices

The current value at which a good or service can be bought or sold in a marketplace.

Income Exchange

A process where different forms of income are exchanged, typically in an economic or financial system.

Demand Curve

A chart that represents the correlation between a product's price and the amount of that product buyers are prepared and capable of buying at different price levels.

Hamburgers

A popular fast food item consisting of a cooked patty, usually of ground beef, placed inside a sliced bun, often served with various accompaniments and condiments.