When Evaluating a Firm's Stock, Past Performance

question 111

Multiple Choice

When evaluating a firm's stock, past performance

• A) is useless since investors are only concerned with future returns.
• B) can provide insight about the firm's future direction.
• C) is only important if the firm is in a stable industry.
• D) is not used by stock analysts.

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Definitions:

Kruskal-Wallis Test

A nonparametric statistical test used to compare three or more independent samples, determining if there is a statistically significant difference between them.

Significance Level

The likelihood of incorrectly dismissing the null hypothesis in a statistical analysis when it is in fact correct.

Travel Time

The duration required to go from one location to another by any mode of transportation.

Routes

Paths or directions taken to get from one location to another, often used in navigation or in the planning of trips.