Multiple Choice
If you are looking to invest with a low-risk profile, which of the following investment options is generally considered the most appropriate?
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7. Receivables and Investments
Introduction to Investments in Securities
Multiple Choice
Which one of the following is the rate at which a stock's price is expected to appreciate?
A
Capital appreciation rate
B
Coupon rate
C
Current ratio
D
Dividend yield
Verified step by step guidance1
Understand the concept of 'Capital appreciation rate': This refers to the rate at which the price of a stock is expected to increase over time, reflecting the growth potential of the investment.
Review the term 'Coupon rate': This is the annual interest rate paid on a bond's face value, unrelated to stock price appreciation.
Examine the term 'Current ratio': This is a liquidity ratio used to measure a company's ability to pay short-term obligations, not related to stock price appreciation.
Understand 'Dividend yield': This is the annual dividend payment expressed as a percentage of the stock's current price, focusing on income rather than price appreciation.
Conclude that the correct answer is 'Capital appreciation rate,' as it directly relates to the expected increase in a stock's price over time.
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