For Information to Be Useful,it Must Be Relevant

question 71

Multiple Choice

For information to be useful,it must be relevant.Information is relevant when it

• A)is verifiable.
• B)causes users to reach a different decision.
• C)mirrors the true economic situation of a business.
• D)is understandable.

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Definitions:

Portfolio Variance

A measure used in finance to quantify the volatility from the mean return of a portfolio, indicating the spread of its returns.

Cyclical Stock

A stock whose price is affected by macroeconomic changes in the overall economy and tends to rise and fall with the business cycle.

Countercyclical Stock

A stock whose performance is inversely related to the economy's performance, typically doing well during economic downturns.

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks. It is widely used for pricing risky securities.