If a Corporation's Cash Flows Are Consistently Lower Than Net

question 38

True/False

If a corporation's cash flows are consistently lower than net income, it could be a sign of a cash shortage in the future.

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Definitions:

Excess Return

The return achieved by an asset that exceeds the risk-free rate of return.

Excess Returns

Excess returns refer to the returns achieved above a benchmark or a risk-free rate of return.

Market Index

A statistical measure that reflects the overall movement of the market or a specific sector of the market.

Global Minimum Variance Portfolio

An investment portfolio that aims to achieve the lowest possible level of risk (variance) for a given rate of expected return, comprising assets from around the world.