Which of the Following Is the Main Lesson That Analysts

question 99

Multiple Choice

Which of the following is the main lesson that analysts and investors should take from the case of Enron?

• A)The usefulness of financial statements to investors is entirely dependent on the ethics of those constructing them.
• B)It is not possible to effectively evaluate a company unless all the financial statements are fully and correctly prepared.
• C)The information in financial statements should be viewed extremely critically.
• D)Readers of even fraudulent financial statements can spot signs of a firm's financial health if those statements are read fully and with care.
• E)Financial statements are too easily manipulated and cannot be taken at face value.

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Definitions:

Expected Frequency

The forecasted count of occurrences or instances in a category or class based on the probabilities of outcomes in a statistical experiment.

Groups

Collections of subjects, items, or categories that are analyzed in research to determine the effect of certain variables.

Total N

Total N denotes the total number of observations or cases considered in a dataset or study.

Chi-square Statistic

A measure used in statistics to assess the differences between observed and expected frequencies in one or more categories.