Assume that for the entire business sector of a private closed economy there is $0 worth of investment projects which will yield an expected rate of return of 25 percent or more.But there are $15 worth of investments which will yield an expected rate of return of 20-25 percent; another $15 with an expected rate of return of 15-20 percent; and similarly an additional $15 of investment projects in each successive rate of return range down to and including the 0-5 percent range. Which of the lines on the above diagram represents these data?
A)A
B)B
C)C

Question

Assume that for the entire business sector of a private closed economy there is $0 worth of investment projects which will yield an expected rate of return of 25 percent or more.But there are $15 worth of investments which will yield an expected rate of return of 20-25 percent; another $15 with an expected rate of return of 15-20 percent; and similarly an additional $15 of investment projects in each successive rate of return range down to and including the 0-5 percent range.  Which of the lines on the above diagram represents these data?
A)A 
B)B 
C)C

Quizplus · Accepted Answer

Line B represents these data because it shows a decreasing slope as the rate of return decreases, indicating that there are more investment projects with lower rates of return. Line A shows a constant rate of return for all projects, which does not match the given scenario. Lines C and D both show increasing slopes as the rate of return decreases, which also does not match the given scenario.

Assume That for the Entire Business Sector of a Private