Which refers to the ability of an asset to generate returns, the returns of which are then reinvested in order to generate their own returns?
A) buy and hold
B) compounding
C) simple returns
D) extrapolation

Question

Quizplus · Accepted Answer

Compounding refers to the process where returns generated by an asset are reinvested to generate more returns in the future. This leads to exponential growth in the value of the asset over time.

Which Refers to the Ability of an Asset to Generate