Comparisons of Basic Earnings Per Share with Other Companies and the Industry

question 6

True/False

Comparisons of basic earnings per share with other companies and the industry averages are usually not very meaningful.

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Definitions:

Back-end Loads

Fees paid by investors when selling mutual fund shares, typically decreasing over time the longer the shares are held.

Hedge Fund

A private investment fund that employs a variety of strategies to earn active return, or alpha, for their investors, often involving leverage, derivatives, and short selling.

SEC Regulation

A set of rules and laws enacted by the U.S. Securities and Exchange Commission to regulate securities markets and protect investors.

Institutional Investors

Institutional investors are large organizations, like pension funds and mutual funds, that invest substantial amounts of money in securities and real estate.