Rates of Return Should Normally Be Expressed on an Aftertax

question 18

Multiple Choice

Rates of return should normally be expressed on an aftertax basis,which means that:

• A)Returns on tax-sheltered pensions would be compounding at a different rate than personal sums
• B)Returns on tax-sheltered pensions would be compounding at the same rate as personal sums
• C)Returns are generally inaccurate
• D)Both a and b
• E)Both b and c

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Definitions:

Normal Distribution

A bell-shaped probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

Standard Deviation

Standard Deviation is a measure of the amount of variation or dispersion present in a set of values, indicating how spread out the values are.

Fast Food

A type of food service that emphasizes minimal preparation time and quick service, often associated with preheated or precooked ingredients served in a packaged form for take-away.

Probability Mass Function

An operation that calculates the chance that a given discrete random variable precisely equals a certain value.