Which of the following statements is true of investment returns?
A) A change in the price of the underlying asset usually has no impact on returns to investment.
B) Income yield always accounts for the bulk of the returns from an investment.
C) The higher the price of the asset during the time of purchase, the lower the returns from that investment.
D) The higher the income yield, the lower the overall returns from that investment.

Question

Quizplus · Accepted Answer

The statement "The higher the price of the asset during the time of purchase, the lower the returns from that investment" is true. This is because when the price of an asset is higher, an investor will need to put more money into the investment to earn the same return, making the return lower overall. The other statements are not true.

Which of the Following Statements Is True of Investment Returns