I Have Lived in a House on the Mississippi River

question 68

Multiple Choice

I have lived in a house on the Mississippi River for many years and have never seen a flood. Therefore, there is no reason for anyone to buy flood insurance. This statement is an example of

• A) fallacy of composition.
• B) post hoc, ergo propter hoc fallacy.
• C) fallacy of inductive reasoning.
• D) ceteris paribus fallacy.

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Definitions:

Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Treasury Stock

Shares of a company's own stock held by the company itself, often bought back from shareholders and not considered when calculating earnings per share or dividends.

Retained Earnings

The portion of a company's profits that is not distributed to shareholders as dividends but is kept by the company for reinvestment.

Net Income

The final financial gain of a business once taxes and all expenses are subtracted from the overall income.