Cash Flow and Risk Are the Key Determinants in Share

question 7

Multiple Choice

Cash flow and risk are the key determinants in share price. Increased cash flow results in ________, other things remaining the same.

• A) a lower share price
• B) a higher share price
• C) an unchanged share price
• D) an undetermined share price

Identify and categorize investments as held-to-maturity, trading, or available-for-sale securities.

Comprehend the accounting treatment and valuation of trading and available-for-sale securities.

Understand the equity method for accounting investments of 20-50% in another company's stock.

Differentiate between the fair value method and equity method of accounting for investments.

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Definitions:

Control Group

In experimental research, the group of participants that does not receive the treatment or intervention being tested, used as a baseline to measure the effects of the treatment.

Experimental Group

The group in an experiment whose experience is changed as part of the experiment.

Hypothetical Group

An imagined or theoretical group of individuals created for the purpose of discussion, analysis, or experimentation.

Reliable

Consistently good in quality or performance; able to be trusted.