Which One of the Following Statements About Market and Book

question 79

Multiple Choice

Which one of the following statements about market and book value is correct?

• A) All firms sell at a market-to-book ratio above 1.
• B) All firms sell at a market-to-book ratio greater than or equal to 1.
• C) All firms sell at a market-to-book ratio below 1.
• D) Most firms have a market-to-book ratio above 1, but not all.

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Definitions:

Reciprocity

A social norm of responding to a positive action with another positive action, fostering mutual benefit and cooperation.

Mere-Exposure Effect

A mental effect in which individuals naturally favor items or concepts they recognize due to their familiarity.

Halo Effect

A cognitive bias where the perception of one positive trait in an individual leads to the assumption of other positive traits or abilities.

Self-Serving Bias

A cognitive bias that involves attributing positive events to one's own character but attributing negative events to external factors.