When the Interest Expense Is Zero, the Percentage Change in Earnings

question 117

True/False

When the interest expense is zero, the percentage change in earnings per share will be the same as the percentage change in EBIT.

Describe the methodologies and findings of tests for market efficiency, including the performance of professional managers and investment strategies.

Distinguish between conventional utility theory and prospect theory regarding the shape of utility functions and their implications for investor behavior.

Recognize the role of various market sentiment indicators and their implications for predicting market movements.

Appreciate the relevance of behavioral explanations, such as overconfidence and representativeness, for understanding market anomalies and momentum.

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Definitions:

Private Good

A product or service that is excludable and rival in consumption, meaning its use is limited to paying customers and one individual's use diminishes another's ability to use it.

Cheeseburger

A cooked ground beef patty served between two slices of a bun, often with various toppings such as cheese, lettuce, and tomatoes.

National Defense

The government activities involved in defending a country against foreign threats, including maintaining armed forces and defensive measures.

Nonexcludable

A characteristic of public goods where it is not possible to prevent anyone from accessing and using the good.