Which of the Following Statements Does $\underline{not}$ Apply to the Study by Lev That Examined Earnings Numbers

question 58

Multiple Choice

Which of the following statements does $\underline{not}$ apply to the study by Lev that examined earnings numbers and stock returns?

• A)According to Lev, over time, the correlation between earnings numbers and stock returns has been low.
• B)Lev believed that earnings have very little explanatory power relative to changes in stock prices.
• C)Lev believed that one of the primary reasons for the level of correlation between earning and stock returns lies with the low quality of reported income numbers.
• D)The study's results contradicted those of the Ou and Penman study.

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