When You Go to the Store to Purchase a New

question 73

Multiple Choice

When you go to the store to purchase a new MP3 player or cell phone you typically must pay a tax in addition to the listed retail price.This tax is an example of

• A)a value-added tax.
• B)a sin tax.
• C)an excise tax.
• D)a sales tax.
• E)a tariff.

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Definitions:

Market Index

An indicator used to represent the performance of specific sectors or the market as a whole, often compiled from a set of selected stocks.

Active Portfolio

A portfolio that undergoes frequent trading and adjustments by a manager in an attempt to outperform the market or a specific benchmark.

Treynor-Black Model

A portfolio optimization model that blends a passive and an active portfolio for potential risk-adjusted returns superior to the market.

Alpha Coefficient

A measure of the performance on a risk-adjusted basis, calculating how much a portfolio or investment has returned in comparison to the overall market or a benchmark index.