New investment will be undertaken up to the point where the expected rate of return equals
A)zero
B)10 percent
C)5 percent
D)the market interest rate
E)the inflation rate

Question

Quizplus · Accepted Answer

The expected rate of return on an investment should at least equal the market interest rate, otherwise, investors will choose other opportunities with higher returns. Therefore, the best choice is D, which is the market interest rate.

New Investment Will Be Undertaken Up to the Point Where