Earnings That Are High Quality Would

question 17

Multiple Choice

Earnings that are high quality would:

• A) be informative about current performance and provide information about the long-run sustainability of profits.
• B) be informative about past performance and provide information about the long-run sustainability of profits.
• C) be informative about current performance and provide information about the long-run sustainability of assets.
• D) be informative about past performance and provide information about the long-run sustainability of assets and liabilities.

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Definitions:

Investment

Allocation of resources, usually financial, in assets or projects expected to yield returns over time.

Chebysheff's Theorem

A statistical rule stating that for any dataset, regardless of distribution, a certain proportion of values will fall within a specified number of standard deviations from the mean.

Empirical Rule

A statistical rule stating that for a normal distribution, nearly all data will fall within three standard deviations of the mean.

Distribution

Refers to the way in which values in a dataset are spread out or distributed.