Which of the Following Is True

Multiple Choice

Which of the following is true?

A) In a competitive capital market, private investors have a strong incentive to evaluate projects carefully and allocate their funds toward those projects expected to yield the highest rates of return.
B) In a competitive environment, profitable investment projects will tend to increase the wealth of the nation.
C) When investment funds are allocated by governments (rather than capital markets) , political clout rather than the expected rate of return will generally determine which projects are undertaken.
D) All of the above are correct.