To Earn the Highest Possible Return in the Stock Market

question 32

Multiple Choice

To earn the highest possible return in the stock market, you will need to

• A) invest in the most well-known stocks.
• B) diversify your portfolio.
• C) accept a high level of risk.
• D) buy only the stocks of large, international firms.

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Definitions:

Schedule M-1

A form used by corporations to reconcile financial statement income with taxable income as reported on the corporation's tax return.

Taxable Income

The amount of income used to calculate how much tax an individual or a company owes to the government.

Book Income

The income reported by a business based on the accounting rules of the firm, not necessarily reflecting the taxable income reported to the IRS.

Net Capital Loss

The result when the total capital losses from investments exceed the total capital gains.