Financial Information Is Relevant for All of the Following Reasons

question 83

Multiple Choice

Financial information is relevant for all of the following reasons except:

• A)for making predictions about the future cash flows
• B)for making comparisons with industry data.
• C)to determine the liquidation values of capital assets
• D)for confirming or correcting past evaluations.

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Definitions:

Semi-strong Form Efficiency

A form of market efficiency that posits all publicly available information is fully reflected in stock prices, including historical financial data and current news.

Stock Price

Stock Price is the current price at which a share of stock is trading on the market, influenced by various factors including company performance, investor sentiment, and market conditions.

Trading Day

A day on which stock markets are open for trading.

Average Return

The arithmetic mean of a series of returns generated over a period of time.