Reference - 8

question 20

Multiple Choice

Reference - 8.1: Use the information given below to answer questions
Rob is a financial manager with Sharez, an investment advisory company. He must select specific investments-for example, stocks and bonds-from a variety of investment alternatives.
-Reference - 8.1. Which of the following statements is most likely to be the objective function in this scenario?

• A) Minimization of the number of stocks held
• B) Maximization of expected return
• C) Minimization of tax dues
• D) Maximization of investment risk

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Definitions:

City Wage Tax

A local tax imposed on individuals who work in a city, calculated as a percentage of their wages or salaries.

Proportional

Describes a relationship where changes in one variable cause changes in another variable at a constant ratio or rate.

Average Tax Rate

The ratio of total taxes paid to total income, representing the overall percentage of income that is taken by taxes.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating how much of any additional income will be taken in taxes.