Which of the Following Statements Is Most Correct

question 28

Multiple Choice

Which of the following statements is most correct?

• A) Many large firms operate different divisions in different industries, and this makes it hard to develop a meaningful set of industry benchmarks for these types of firms.
• B) Financial ratios should be interpreted with caution because there exist seasonal and accounting differences that can reduce their comparability.
• C) Financial ratios should be interpreted with caution because it may be difficult to say with certainty what is a "good" value. For example, in the case of the current ratio, a "good" value is neither high nor low.
• D) Ratio analysis facilitates comparisons by standardizing numbers.
• E) All of the statements above are correct.

---

Definitions:

Novel Stimuli

New or unfamiliar stimuli that have not been previously experienced, often triggering curiosity or exploration.

Free Riding

Benefiting from resources, goods, or services without contributing to the cost or effort involved.

Social Facilitation

The tendency for people to perform differently when in the presence of others than when alone, typically improving on simple tasks and doing worse on complex tasks.

Friendly Audience

A group of people who are supportive, receptive, and encouraging, often making it easier for speakers or performers.