Which of the Following Is NOT a True Statement

question 95

Multiple Choice

Which of the following is NOT a true statement?

• A)The capital gain yield measures the appreciation in the price of the asset from some starting price.
• B)Common shares should lose from inflation over the long run as their prices and cash flows are not fixed.
• C)The capital loss yield measures the depreciation in the price of the asset from the purchase price.
• D)The addition of the capital gain (or loss)yield explains why the yield gap between equities and bonds has varied so much over time.

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Definitions:

If-Converted Method

A calculation technique used to assess the impact on diluted earnings per share if all convertible securities were converted into common stock.

Convertible Securities

Financial instruments, such as bonds or preferred stocks, that can be converted into a predetermined number of common stock or equity shares.

Diluted Earnings

The reduced earnings per share figure when considering the conversion into common stock of all potential shares that could dilute earnings.

Assumed Shares

Shares that are considered to have been issued in hypothetical scenarios, such as in the calculation of diluted earnings per share.