In Regards to Benchmarking,which of the Following Statements Is Correct

question 32

Multiple Choice

In regards to benchmarking,which of the following statements is correct?

• A)The two main types of benchmarks in financial statement analysis include benchmarking against prior year of the same company and benchmarking against a key competitor.
• B)Benchmarking is the practice of comparing a company with information provided by the Financial Standards Accounting Board.
• C)Risk Management Association provides common-size statements for most industries.
• D)It is not helpful to provide common-size percentages in a graphical manner.

---

Definitions:

Hypothesis Testing

A statistical method used to decide whether a hypothesis about a parameter in a population is supported by the data gathered from a sample.

Test Statistic

A numerical value employed in statistical hypothesis testing for deciding if the null hypothesis should be discarded.

Confidence Interval

A range of values, determined from sample statistics, that is believed to contain the true population parameter with a certain probability.

Critical Value

A point on the scale of the test statistic beyond which we reject the null hypothesis; it marks the threshold for statistical significance.