The Main Difference Between Accounting Measures of Firm Performance and Stock-Market

question 27

Multiple Choice

The main difference between accounting measures of firm performance and stock-market measures of firm performance is:

• A)Accounting measures are less reliable because of firms' discretion over how they apply accounting conventions
• B)Stock market measures are less reliable because share prices are so volatile
• C)Accounting data offers a sound basis for forecasting future performance
• D)Accounting measures are backward looking;stock market measures are forward looking

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