ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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guarantees how much you will earn on the money you invested.
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is an estimate of how much you will earn on the money you invested.
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shows past performance and how it might do in the future.
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is a measure of the risk associated with your investment portfolio.
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Detailed explanation-1: -Average Rate of Return (ARR) refers to the percentage rate of return expected on investment or asset is the initial investment cost or average investment over the life of the project.
Detailed explanation-2: -Investors looking to interpret historical returns should bear in mind that past results do not necessarily predict future returns. The older the historical return data, the less likely it’ll be successful at forecasting returns in the future.
Detailed explanation-3: -The rate of return calculates the percentage change from the beginning to the end of a specified period. Investors can also use it to compare the investment’s performance with past periods or returns from other investments.
Detailed explanation-4: -Investors and market analysts use the average return to determine the past returns for stock or security. The average return is also used to establish the yields of a company’s portfolio.