When Two Companies' Profits Tend to Move in Opposite Directions

question 60

Multiple Choice

When two companies' profits tend to move in opposite directions in response to changing economic factors, the companies are likely

• A) negatively correlated.
• B) not correlated.
• C) unrelated in industry sector.
• D) in different regions of the world.

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Definitions:

Double-Entry Bookkeeping

A system of recording and classifying business transactions that maintains the balance of the accounting equation.

Annual Report

Summary of a firm’s financial information, products, and growth plans for owners and potential investors.