Exhibit 2-9

question 54

Multiple Choice

Exhibit 2-9.An analyst constructed the following frequency distribution on the monthly returns for 50 selected stocks: Refer to Exhibit 2-9.The proportion of stocks with returns of 0% up to 10% is _____.

• A)0.30
• B)0.50
• C)0.66
• D)0.80

---

Definitions:

Margin of Safety

The difference between actual or projected sales and the break-even point, indicating the amount of sales decline a business can tolerate.

Net Operating Income

The profit generated from a business's regular operational activities, excluding expenses and taxes.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been deducted, indicating the portion available to cover fixed costs and generate profit.

Net Operating Income

Gross income after operational expenses are deducted but before income taxes and interest are calculated.