Which of These Is a Disadvantage of a Country Adopting

question 33

Multiple Choice

Which of these is a disadvantage of a country adopting international accounting standards compared with the country developing its own standards?

• A) It will reduce the comparability of different countries' financial reports.
• B) International standards by their nature must be general and involve compromises.
• C) It will increase accounting and reporting costs for multinational companies.
• D) All are disadvantages.

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Definitions:

Inflation Adjusted Risk

Refers to the danger of losing purchasing power of an investment due to inflation outpacing the returns.

Systematic Risk

The inherent risk of exposure to market changes that cannot be diversified away, affecting all securities in a similar manner.

Portfolio Beta

An evaluation of a portfolio's systemic risk in relation to the entire market's volatility.