One Study of the Distribution of Wealth Indicates That the Bottom

question 40

Multiple Choice

One study of the distribution of wealth indicates that the bottom 40 percent of households hold 1 percent or less of total marketable wealth in the United States. Which of the following people is most likely to be in the bottom 40 percent?

• A) Ann is 29 years old, earns $120,000 a year, has no financial assets, but still has student loans of $4,000.
• B) Betty is 29 years old, earns $40,000 a year, has $80,000 in a savings account, and has credit card debt of $4,000.
• C) Carol is 69 years old, is disabled, and is living on Social Security and dividends from her $500,000 of mutual funds. She has no debt.
• D) Debra is 45 years old, and the only money she gets is $40,000 of rental payments from an apartment building she owns that is worth $250,000. She owes the bank $50,000.

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Definitions:

Organizational Culture

The shared values, beliefs, and practices that shape the social and psychological environment of an organization.

Sarbanes-Oxley Act

A U.S. federal law enacted in 2002 to protect investors from fraudulent financial reporting by corporations, also known as the SOX Act.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

WorldCom

A former American telecommunications company that became infamous for its massive accounting scandal, leading to its bankruptcy in 2002.