Which of the Following Statements Is Incorrect

question 95

Multiple Choice

Which of the following statements is incorrect?

• A)Property taxes are levied on real estate.
• B)Excise taxes are assessed on items such as gasoline and telephone use.
• C)Gift taxes are imposed on the recipient of a gift.
• D)The estate tax is based on the fair market value of property at death or the alternate valuation date.

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Definitions:

Reward-to-risk Ratio

A measure used to compare the expected returns of an investment to the amount of risk undertaken to capture these returns.

Market Risk Premium

Market Risk Premium refers to the excess return that an investor anticipates receiving from a risky market portfolio over that of risk-free securities.

Security Market Line

A line on a graph that describes the relationship between risk and expected return, used in the capital asset pricing model.

Security Market Line

A line that represents the relationship between the expected return of a security and its systemic risk, illustrating the risk-return tradeoff in the capital asset pricing model.