A Capital Gain Is

question 10

Multiple Choice

A capital gain is

• A) a financial instrument that gives the holder a share in the ownership of a firm and therefore the right to share in the profits of the firm.
• B) the portion of a corporation's profits that the firm pays out each period to its shareholders.
• C) an increase in the value of an asset over the price initially paid for it.
• D) the difference between an individual's economic income and money income.

Distinguish between one-tailed and two-tailed tests in hypothesis testing.

Recognize the significance level (\(\alpha\)) and its role in hypothesis testing.

Apply probability principles to evaluate outcomes of random trials.

Analyze real-world data to make statistical inferences.

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Definitions:

Price/Earnings

Also known as the P/E ratio, this measures a company's current share price relative to its per-share earnings.

Profit Margin

A financial metric expressing the percentage of income that remains as profit after all expenses, including taxes, are subtracted from total revenues.

Acid-Test

A financial metric that assesses a company's ability to pay its current liabilities with its quick assets (cash, marketable securities, and receivables).

Operating Segment

An operating segment is a component of a business that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity's chief operating decision maker.