Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Rate-based decision statistics provide a rate of return based on which one of the following?

The ending market value of the investment

The number of shares purchased

The average amount invested over the period

The total cash inflows only

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Verified step by step guidance

Understand the concept of rate-based decision statistics: These statistics are used to evaluate the performance of an investment by calculating a rate of return over a specific period.

Identify the key factor in calculating the rate of return: The rate of return is typically based on the average amount invested over the period, as this provides a balanced measure of the investment's performance.

Clarify why other options are incorrect: The ending market value of the investment, the number of shares purchased, and the total cash inflows only do not provide a comprehensive basis for calculating the rate of return. They may be components of the calculation but are not the primary basis.

Relate the average amount invested to the formula: The rate of return formula often uses the average amount invested as the denominator to ensure the calculation reflects the investment's performance over time.

Conclude the reasoning: The correct answer is 'The average amount invested over the period' because it accounts for the investment's fluctuations and provides a fair measure of return.