Which of the Following Statements Is Not True

question 46

Multiple Choice

Which of the following statements is not true?

• A)A review of financial statements,including the notes,will indicate how conservative the statements are in regard to accounting policies.
• B)Accounting policies that result in the slowest reporting of income are the most conservative.
• C)When a firm has conservative accounting policies,it is said that its earnings are of high quality.
• D)Under inflationary conditions,the least conservative inventory method is fifo.
• E)Conservative accounting policies always result in the lowest reported income for any given period of time.

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Definitions:

Interest Rate Sensitivity

The degree to which the value of an investment, particularly fixed-income securities, changes in response to variations in interest rates.

Duration

A measure of the sensitivity of the price of a bond or a bond portfolio to changes in interest rates, usually expressed in years.

Interest-Rate Risk

The risk that an investment's value will change due to a change in the absolute level of interest rates, which can affect both debt and equity instruments.

Bond Portfolio Managers

Professionals who specialize in the strategic management of bond portfolios, aiming to maximize returns and minimize risks for investors.