A Critical Assumption Is One

question 82

Multiple Choice

A critical assumption is one

• A) that affects a model in important ways
• B) that is understood only by economists
• C) that makes a model simpler without affecting any of its important conclusions
• D) with negative implications for a process or outcome
• E) that is critically unreasonable

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Definitions:

Noncumulative

Pertaining to preferred stock dividends, where dividends not paid in one period do not accumulate and are not required to be paid in future periods.

Preferred Stock

A class of ownership in a corporation with a higher claim on assets and earnings than common stock, usually with fixed dividends.

Par Value

The nominal or face value of a bond, share of stock, or other financial instrument, as stated by the issuer.

No Par Common Stock

Shares issued without a nominal or face value, where the value is determined by the price investors are willing to pay.