Multiple Choice $150 billion worth of investments have expected rates of return of 20 percent or lower. $40 billion worth of investments have expected rates of return between 20 percent and 22 percent. $150 billion worth of investments have expected rates of return exactly equal to 20 percent. $260 billion worth of investments have expected rates of return higher than 20 percent.

Multiple Choice $150 billion worth of investments have expected rates of return of 20 percent or lower. $40 billion worth of investments have expected rates of return between 20 percent and 22 percent. $150 billion worth of investments have expected rates of return exactly equal to 20 percent. $260 billion worth of investments have expected rates of return higher than 20 percent.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Use the following cumulative investment schedule to answer the next question. Expected Rate of Return Cumulative Amount of Investment (in billions)

Multiple Choice
$150 billion worth of investments have expected rates of return of 20
percent or lower.
$40 billion worth of investments have expected rates of return between
20 percent and 22 percent.
$150 billion worth of investments have expected rates of return exactly
equal to 20 percent.
$260 billion worth of investments have expected rates of return higher
than 20 percent.

Expected Rate of Return
22%
20
16
10
5
2
Cumulative Amount of
Investment (in Billions)
$ 110
150
180
210
295
380
According to the given cumulative investment table,

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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