In a Lorenz Curve Diagram,the Size of the Area Between

question 74

Multiple Choice

In a Lorenz curve diagram,the size of the area between the Lorenz curve and the diagonal line represents

• A)the percentage of income received by the bottom 20% of families.
• B)the percentage of income received by the top 5% of families.
• C)the dollar incomes of the bottom 40% of families.
• D)complete income equality.
• E)the degree of inequality in the distribution of income.

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Definitions:

Revenue Forecast

An estimate of the amount of money a company expects to earn over a specific period in the future.

Sustainable Growth Rate

The maximum rate at which a company can grow without needing to increase financial leverage.

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends.

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets, measuring how efficiently assets are utilized.