In Predicting the Expected Future Return of the Market, One

question 49

Multiple Choice

In predicting the expected future return of the market, one of the dangers is that:

• A)the past is not indicative of the future.
• B)the past period measured is too short to get a reasonable estimate of the future.
• C)the equity premium does not include the premium on debt.
• D)A and B.
• E)A and C.

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Definitions:

Financing Activities

Transactions and events where cash is obtained from or repaid to investors and creditors excluding suppliers, which affect a company's equity or borrowings.

Cash Payments

Outflows of cash to settle obligations or purchase goods and services, as documented in the cash flow statement.

Indirect Method

A approach used in cash flow statements to adjust net income for the effects of non-cash transactions and changes in working capital.

Operating Activities

Operating activities involve the primary revenue-generating activities of an organization, including production, sales, and delivery of the company’s product as well as administrative and general expenses.