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Banking System and Capital Market Questions and Answers for Competitive Exams

Question

As the number of investments made by a firm increases, its internal rate of return

A Declines due to diminishing marginal productivity
B Declines because the market rate of interest will fall, ceteris paribus
C Increases to compensate the firm for current consumption foregone
D Increases because the level of savings will fall

Answer & Explanation

Answer: Option [C]

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