Siroun Is Informed That Both of Her One-Year-Old Twin Daughters

question 87

Multiple Choice

Siroun is informed that both of her one-year-old twin daughters are of "normal" weight. She is then informed that one weighs 16 pounds and the other weighs 26 pounds. How is this possible?

• A)One of the twins likely has Down syndrome.
• B)The daughters were likely misweighed.
• C)The "normal" weight range of one-year-olds is very wide.
• D)The initial "normal" information was incorrect.

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Definitions:

Capital Structure

The specific blend of equity and debt that a company employs to fund its general activities and expansion.

Market Risk Premium

Refers to the extra expected return that investors demand for choosing to invest in the stock market over risk-free securities.

Levered Firm

A company that employs debt in its capital structure.

All-Equity Financing

This involves funding a business solely through the sale of equity, without incurring any debt.