Use the Table for the Question(s) Below

question 104

Multiple Choice

Use the table for the question(s) below.
Consider the following returns:

-The covariance between Lowes' and IBM's returns is closest to:

• A) 0.05
• B) 0.06
• C) 0.10
• D) 0.71

---

Definitions:

Depreciation Tax Shield

A reduction in taxable income for businesses that allows for the deduction of depreciation expenses.

CCA Class

Refers to the classification system for capital cost allowance used in Canada, which groups assets with similar tax depreciation properties.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, indicating the proportion of additional income that is paid in taxes.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.