Proper Interpretation of Accounting Ratios Requires

question 23

Multiple Choice

Proper interpretation of accounting ratios requires:

• A)Comparison with competitors
• B)Analysing trends over 5 years or so
• C)An understanding of the business and industry
• D)All of the above

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Definitions:

Convertible Bonds

Bonds that can be converted into a predetermined number of shares of the issuer's stock, at the option of the bondholder.

Currency Speculation

The act of buying and selling currencies with the aim of profiting from changes in exchange rates.

Market Timing

The strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements, often with the goal of buying low and selling high.

Derivative Positions

Financial contracts whose value is derived from the value of an underlying asset.