Which of the Following Is Not Correct

question 92

Multiple Choice

Which of the following is not correct?

• A) When evaluating a mutual fund, an important question to ask is this: How long has the present fund manager been managing the fund?
• B) Over the years, the majority of managed mutual funds have failed to outperform the Standard & Poor's 500 stock index.
• C) Managed funds may be open-end funds or closed-end funds.
• D) A benchmark of a good fund manager is the ability to increase share value when the economy is good and retain that value when the economy is bad.
• E) A managed fund will outperform an index fund only 60% of the time.

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Definitions:

Indirect Method

An approach used in cash flow statements where net income is adjusted for non-cash transactions, deferred revenues, and expenses to calculate cash flow from operating activities.

Indirect Approach

A method used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.

Noncash Charges

Expenses reported on an income statement that do not involve actual cash flow, such as depreciation, amortization, and stock-based compensation.

Noncash Credits

Transactions that increase a company's assets or decrease liabilities without the direct movement of cash.