Final answer:
The statement is true; a quality long-term growth investment strategy is typically adopted by investors for the long-term accumulation of capital, focusing on sustainable growth and wealth accumulation over time. Firms tap into various sources of financial capital to make such long-term investments.
Step-by-step explanation:
The most common reason for an investor to adopt a quality long-term growth investment strategy is indeed for the long-term accumulation of capital. This strategy focuses on investing in high-quality companies that have the potential for sustainable growth over a long period. Adopting this approach generally involves looking at factors such as strong management teams, stable earnings, and competitive advantages. The goal is to allow investments to increase in value over time, contributing to wealth accumulation.
Firms can raise financial capital to invest in long-term projects through various means. These include attracting early-stage investors, reinvesting profits, borrowing through banks or bonds, and selling stock. These sources of capital are crucial for funding investments that can lead to capital deepening, an increase in the amount of capital per worker, which is a key driver of economic growth.The most common reason for an investor to adopt the quality long-term growth investment strategy is for long-term accumulation of capital. This statement is True. The quality long-term growth investment strategy focuses on investing in companies with strong fundamentals, sustainable competitive advantages, and growth potential. By holding these investments for the long term, investors aim to benefit from the compounding effect of the growth in the value of these companies over time.