If You Score at the 50^th Percentile on an Intelligence

question 197

Multiple Choice

If you score at the 50^th percentile on an intelligence test, this means that

• A) you correctly answered half of the questions on the test.
• B) you scored significantly below average on this test.
• C) fifty people who took the test scored lower than you.
• D) half the people your age who took the test scored higher than you and half scored lower than you.

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Definitions:

Equity Risk

The risk of loss associated with fluctuations in the price of equities or stocks.

M&M Proposition I

A principle in corporate finance that asserts the market value of a firm is unaffected by the capital structure, assuming no taxes and perfect markets.

M&M Proposition II

A theory proposing that the cost of equity increases with the level of debt in a company, making the firm's weighted average cost of capital remain unchanged.

Cost of Equity

The return rate that shareholders require to invest in a company's equity, taking into account the risk associated with the investment.