If Investors Started to Prefer Investing in More Ethical Companies

question 292

Multiple Choice

If investors started to prefer investing in more ethical companies, then it would be expected that the stock prices for those companies would

• A) increase, and the rates of return would decrease relative to other companies.
• B) increase, and the rates of return would increase relative to other companies.
• C) increase, but the rates of return would stay the same relative to other companies.
• D) decrease, and the rates of return would decrease relative to other companies.

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Definitions:

Unearned Revenue

Money received by a business for goods or services yet to be delivered or performed, recorded as a liability on the balance sheet until earned.

Services Revenue

Revenue generated from providing services, as opposed to selling goods or products.

Asset Account

An account that records the value of an entity's resources, such as cash, equipment, inventory, and property.

Cash

Money in the form of currency that is available for immediate use by a company for transactions, payments, and other financial activities.