Comparing a Low Dividend Yield Portfolio to a Well Diversified

question 24

Multiple Choice

Comparing a low dividend yield portfolio to a well diversified portfolio may provide misleading results because

• A) of the tendency to ignore dividends and interest.
• B) low dividend yield stocks are not traded on the New York Stock Exchange.
• C) low dividend yield stocks have lower risk.
• D) low dividend yield stocks tend to have a smaller percentage price increase.

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Definitions:

Adjusting Entries

Journal entries made in accounting records to correct or update financial transactions, often at the end of an accounting period.

Prepaid

Expenses paid in advance for goods or services, which are then recognized over time as the benefits are received.

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded in the financial statements, representing liabilities.

Accrued Revenues

Accrued revenues are earnings recorded in the financial statements for goods delivered or services provided, although no cash has been received yet.