"It Would Be an Undue Hardship to Require People Whose

question 36

Multiple Choice

"It would be an undue hardship to require people whose income is below $15,000 per year to pay income taxes." This statement reflects which of the following principles for a tax?

• A) Benefits-received.
• B) Inexpensive-to-collect.
• C) Ability-to-pay.
• D) Fairness of contribution.

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Definitions:

Residual Standard Deviation

A statistical measure of the amount of variance in investment returns not explained by the beta in the Capital Asset Pricing Model (CAPM).

Geometric Average Return

Is the average rate of return of a set of values calculated using the products of the terms.

Arithmetic Return

The simple average of periodic returns of an investment over a specified time frame.

Dollar-Weighted Return

A method of calculating an investment's return that accounts for the timing and magnitude of cash flows into and out of the investment.