Under What Circumstance Is It NOT to Your Advantage to Guess

question 85

Multiple Choice

Under what circumstance is it NOT to your advantage to guess on a multiple-choice exam?

• A)when you are making a "wild guess" and a correction formula is being used
• B)in any test situation where you are making a "wild guess"
• C)when you can rule out one or more of the alternatives as being incorrect
• D)when the guessing threshold is low

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Definitions:

No-par Common Stock

Shares issued without a specified face value, allowing the company flexibility in setting their price.

Stated Value

A value assigned to no-par stock by the board of directors of a company, used as the basis for capital accounts in the shareholders' equity section of the balance sheet.

Par Preferred Stock

A type of preferred stock that has a nominal face value and is entitled to dividends before any dividends can be issued to common stockholders.

Retained Earnings

Profits that a company has kept or retained rather than distributing to shareholders as dividends.