Which of the Following Is a Conclusion That Can Be

question 36

Multiple Choice

Which of the following is a conclusion that can be drawn from the historical return data presented in this chapter?

• A)An investment in individual stocks tends to be riskier than investing in a stock market index.
• B)An investment in an individual stock would have provided you with a higher return than an investment in bonds, but you would have earned an even higher return by investing in
• The S&P 500 Index.
• C)An investment in any of the individual stocks would have provided you with higher returns than you would have earned by investing in a stock market index or in bonds.
• D)Both A and C are true.

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Definitions:

Revenues

The income generated from normal business operations and includes discounts and deductions for returned merchandise.

Tax

A financial charge or levy imposed by a government on individuals or entities to fund public expenditures, thereby shaping economic policies.

Laffer Curve

An illustration of the relationship between tax rates and tax revenue, suggesting there's an optimal tax rate that maximizes revenue.

Tax Revenue

The capital governments gather through the imposition of taxes.