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Ordinary Negligence by an Accountant Is Not a Violation of Section

question 11

True/False

Ordinary negligence by an accountant is not a violation of Section 10(b)and Rule 10b-5 of the Securities Exchange Act of 1934.


Definitions:

DuPont Formula

A financial analysis method that breaks down return on equity into three components: profit margin, asset turnover, and financial leverage, to help understand a company's financial performance.

Operating Income

Earnings generated from a company's core business operations, excluding deductions of interest and taxes.

Return on Investment

A measure of the profitability and efficiency of an investment, calculated as the net profit of the investment divided by its initial cost.

Invested Assets

Assets that are acquired for the purpose of generating income or appreciating in value, such as stocks, bonds, and real estate.

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