Which of the Following Is the Main Lesson That Analysts

question 99

Multiple Choice

Which of the following is the main lesson that analysts and investors should take from the case of Enron?

• A)The usefulness of financial statements to investors is entirely dependent on the ethics of those constructing them.
• B)It is not possible to effectively evaluate a company unless all the financial statements are fully and correctly prepared.
• C)The information in financial statements should be viewed extremely critically.
• D)Readers of even fraudulent financial statements can spot signs of a firm's financial health if those statements are read fully and with care.
• E)Financial statements are too easily manipulated and cannot be taken at face value.

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Definitions:

IQ Score

A measure of a person's cognitive abilities in relation to their age group, calculated through various standardized tests.

Utility

the total satisfaction or benefit derived from consuming a good or service.

Individual's Intelligence

A measure of a person's cognitive capabilities, including the ability to learn, understand, and apply knowledge.

Executive Control Processes

The cognitive processes that regulate an individual's ability to organize thoughts, actions, and emotions to achieve goals.