Financial Information Is Important to Entrepreneurs Because

question 21

Multiple Choice

Financial information is important to entrepreneurs because:

• A)it pulls together all the information presented in other segments of the business.
• B)it quantifies all the assumptions concerning business operations.
• C)it answers all questions about the business and the entrepreneur.
• D)a and b are both correct.

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Definitions:

Hedge Funds

are investment funds that employ a variety of strategies to earn active return, or alpha, for their investors, often involving higher risks and aiming for higher returns than traditional investments.

Survivorship Bias

The logical error of focusing on instances that survived a selection process and overlooking those that did not because of their lack of visibility.

Backfill Bias

A bias that can occur when historical performances of investment portfolios are artificially inflated because only successful funds are reported or included in analyses.

Incentive Bias

A psychological lean or predisposition towards certain decisions or actions due to promised rewards or incentives.