Which of the Following Is NOT One of the Three

question 17

Multiple Choice

Which of the following is NOT one of the three assumptions underlying value relevance literature?

• A)Share prices adequately represent investors' use of information in valuing equity securities.
• B)Accounting earnings are not highly associated with equity market value changes.
• C)Equity users are the dominant users of financial reports.
• D)Share-price-based tests can measure relevance and reliability as defined by accounting bodies.

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Definitions:

Environmental Resistance

Total of factors in the environment that limit the numerical increase of a population in a particular region.

Carrying Capacity

The maximum population size of a species that an environment can sustain indefinitely, given the food, habitat, water, and other necessities available in the environment.

Exponential Growth

Growth, particularly of a population, in which the increase occurs in the same manner as compound interest.

Lag Phase

The initial period of slow growth or inactivity that occurs after bacteria are introduced to a new environment or nutrient medium.