When a Stock Has an Average Rate of Return of 10

question 240

Multiple Choice

When a stock has an average rate of return of 10% per year, then the value of the stock:

• A) triples in 5 years.
• B) doubles in 7 years.
• C) doubles in 10 years.
• D) triples in 10 years.

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Definitions:

Average Tax Rate

The proportion of the total taxable income paid in taxes, calculated by dividing the total tax amount by the total income.

Regressive Tax

A tax system where the tax rate decreases as the amount subject to taxation increases, often placing a heavier burden on lower-income individuals.

Higher Incomes

Levels of earnings that exceed the average or median income for a particular region or demographic.

Lower Incomes

Lower Incomes refer to the earnings that fall below the average or median income levels within a specific area or population.