If Polygraphs Are Used as the Only Judge of Guilt

question 89

Multiple Choice

If polygraphs are used as the only judge of guilt or innocence,

• A) less than 5 percent of the guilty would have been declared innocent.
• B) less than 5 percent of the innocent would have been declared guilty.
• C) more than one-third of the innocent would have been declared guilty.
• D) more than two-thirds of the guilty would have been declared innocent.

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Definitions:

Beta

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

Flotation Costs

Expenses incurred by a company in issuing new securities, including underwriting, legal, and registration fees, reiterating the cost aspect of raising equity or debt.

Retained Earnings

The portion of a company's net earnings not paid out as dividends but retained by the company to be reinvested in its core business or to pay debt.

Constant Growth

A model assuming that a company's dividends will continue to grow at a constant rate indefinitely, used in valuing stocks.