Which of the Following Statements Is Correct

question 17

Multiple Choice

Which of the following statements is correct?

• A) Expected returns as estimated by a marginal investor are sometimes positive,but realized returns are always negative.
• B) Expected returns as estimated by a marginal investor are always positive,but realized returns are sometimes negative.
• C) Expected returns as estimated by a marginal investor are sometimes negative,but realized returns are always positive.
• D) Expected returns as estimated by a marginal investor are always negative,but realized returns are sometimes positive.

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Definitions:

Expenses Against Revenues

The matching principle in accounting that involves recording expenses in the period in which they helped to generate revenues.

LIFO Perpetual

A perpetual inventory system that uses the Last-In, First-Out method to account for inventory costs, where the most recently acquired items are considered sold first.

FIFO

First In, First Out, an inventory valuation method where goods purchased or produced first are sold or used first.