Which of the Following Statements Is Correct

question 92

Multiple Choice

Which of the following statements is correct?

• A)The dollar return is a more useful measure to compare performance because it more accurately reflects the change in wealth of the investor.
• B)A dominant portfolio is one that has the highest risk and highest return within a set of portfolios.
• C)By adding stocks to your portfolio, it is possible to effectively eliminate nearly all of the market risk.
• D)None of these statements are correct.

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Definitions:

Average Tax Rate

The proportion of total income that an individual or corporation pays in taxes, calculated by dividing the total taxes paid by total income.

Marginal Federal Income Tax

The rate at which the last dollar of a taxpayer's income is taxed by the federal government.

Federal Tax Revenue

Revenue the federal government receives from taxes, including income tax, corporate tax, and other taxes.

Personal Income Tax

A tax levied by the government on individuals’ income, including wages, salaries, and investment returns.