Final answer:
The statement is false as the rate of return is a critical metric for measuring investment performance, influencing profitability, potential growth, and the overall success of an investment program.
Step-by-step explanation:
The statement "the rate of return on an investment has no effect on an investment program" is false. The rate of return is a critical measure of the performance of an investment. It represents the percentage of the investment that is gained or lost over a specific period, typically expressed on an annual basis. Consequently, the rate of return directly influences the effectiveness of an investment program as it reflects the profitability and potential growth of the funds invested.
For instance, if an individual invests in a stock that has a high rate of return, this typically correlates with a successful investment, yielding more earnings and contributing to the overall success of one's investment portfolio. On the other hand, a low or negative rate of return indicates that the investment is performing poorly, which could lead to losses and adversely affect the individual's financial goals.
Investors and financial planners use the rate of return to assess and compare the performance of different investments, manage risks, and plan for future financial needs. Therefore, the idea that the rate of return has no impact on investment decisions or strategies is incorrect. It is a fundamental aspect that guides the selection, management, and adjustment of various investment components within an investment program.