Which of the Following Statements Is Most Correct

question 77

Multiple Choice

Which of the following statements is most correct?

• A) If two firms have the same ROE and the same level of risk, they must also have the same EVA.
• B) If a firm has positive EVA, this implies that its ROE exceeds its cost of equity.
• C) If a firm has positive ROE, this implies that its EVA is also positive.
• D) Statements b and c are correct.
• E) All of the statements above are correct.

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Definitions:

Sampling Process

The practice of selecting a subset of individuals, items, or data points from within a larger population to estimate characteristics of the whole population.

Sampling Error

The discrepancy between the statistical characteristics of a population and those of a sample supposedly representing that population.

Bias

A systematic error or deviation from true results or values, caused by factors that skew the data in a certain direction.

Sampling

The process of selecting a subset of individuals from a population to estimate characteristics of the whole population.