Which of the Following Statements Is False

question 15

Multiple Choice

Which of the following statements is false?

• A) Many managers make the mistake of focusing on accounting earnings as opposed to free cash flows.
• B) Given accurate information about any two of these variables (a firm's future cash flows, its cost of capital, and its share price) a valuation model allows us to make inferences about the third variable.
• C) A valuation model will tell us the most about the variable for which our prior information is the least reliable.
• D) The idea that investors are able to identify positive NPV trading opportunities is referred to as the efficient markets hypothesis.

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Definitions:

Psychasthenia

A psychological disorder characterized by excessive anxiety, feelings of inadequacy, and an inability to cope with demands of daily life.

Schizophrenia

A psychological condition marked by disturbances in thinking, perceptual abilities, emotional reactions, and social behaviors.

Social Introversion

A personality trait characterized by a preference for solitary activities and situations above social interactions.

Response Inventories

Tests designed to measure a person’s responses in one specific area of functioning, such as affect, social skills, or cognitive processes.