If You Own a Share of Stock in a Company

question 103

Multiple Choice

If you own a share of stock in a company and the risk associated with its business falls, you would expect

• A) a capital gain.
• B) a capital loss.
• C) a higher dividend.
• D) a bubble.

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Definitions:

Z-statistic

A measure that describes how many standard deviations an element is from the mean of a population in standardized testing.

Alpha Levels

A threshold value that determines the significance level of a statistical test, representing the probability of rejecting a true null hypothesis (committing a Type I error).

Two-tailed Test

A statistical test that considers the possibility of both positive and negative differences or effects.