Use the Following Information to Answer Questions

question 138

Multiple Choice

Use the following information to answer questions
Lexington Company engaged in the following transactions during 2015,its first year in operation: (Assume all transactions are cash transactions)
1.Acquired $6,000 cash from issuing common stock.
2.Borrowed $4,400 from a bank.
3.Earned $6,200 of revenues.
4.Incurred $4,800 in expenses.
5.Paid dividends of $800.
Lexington Company engaged in the following transactions during 2016:
1.Acquired an additional $1,000 cash from the issue of common stock.
2.Repaid $2,600 of its debt to the bank.
3.Earned revenues,$9,000.
4.Incurred expenses of $5,500.
5.Paid dividends of $1,280.
-The amount of retained earnings on Lexington's 2015 balance sheet was

• A)$6,200.
• B)$5,400.
• C)$1,400.
• D)$600.

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Definitions:

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, commonly used to quantify the amount of variation.

Stock

A kind of financial instrument that indicates possession in a company and symbolizes a right to a portion of the firm's assets and profits.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates higher than average market volatility.

Risk Premium

The additional return an investor requires for taking on a higher level of risk compared to a risk-free investment.