Professor Newton Gave a Midterm Exam Where the Scores Ranged

question 222

Multiple Choice

Professor Newton gave a midterm exam where the scores ranged from 28% to 89%; the average score for the exam was 69%. Based on the phenomenon known as regression toward the mean, you should expect that

• A)almost all students will score lower on the final than they did on the midterm.
• B)almost all students will score higher on the final than they did on the midterm.
• C)the students who scored near the average on the midterm will score lower on the final.
• D)the students who earned the highest scores on the midterm will not do as well on the final.

---

Definitions:

Earnings Per Share

A measure of a company's profitability calculated as net income divided by the number of outstanding shares of its common stock.

Treasury Shares

Shares of a company's own stock that it has repurchased and are held in the company's treasury.

Treasury Stock

Stocks that a company originally issued and then bought back, which decreases the number of shares available for trade in the market.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest.