What Is Least Accurate About the US Experience with the Income

question 6

Multiple Choice

What is least accurate about the US experience with the income tax?

• A) The federal income tax was not used for an extended period until after 1910.
• B) In the late 1800s and early 1900s, people from the South and West were most likely to support an income tax.
• C) Increases in the income tax were justified by using the money for more generous army pensions and increased military spending, especially for the US Navy.
• D) Provisions for the income tax were stated in the US Constitution

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Definitions:

Hedge Ratios

Financial ratios used to calculate the optimal amount of exposure needed to hedge (protect against risk) a position or portfolio.

Long Calls

An option strategy involving the purchase of call options, giving the buyer the right, but not the obligation, to purchase a security at a specified price within a certain time frame.

Delta

In finance, a measure of the sensitivity of an option's price to a change in the price of the underlying asset, indicating how much the price of the option is expected to move based on a $1 change in the underlying asset.

Underlying Asset

The financial asset upon which a derivative's price is based, such as stocks, bonds, commodities, or currencies.