An Increase in the Current Ratio Implies That the Profitability

question 153

True/False

An increase in the current ratio implies that the profitability of the company has increased from the previous period.

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Definitions:

Availability Heuristic

A cognitive bias that causes people to overestimate the importance of information that is readily available to them.

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, known also as the "I-knew-it-all-along" effect.

Confirmation Bias

The tendency to favor, interpret, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Representativeness Heuristic

A cognitive shortcut that involves judging the probability of an event by its similarity to a prototype or an example that comes to mind, rather than on objective probability.