Which of the Following Is Not an Economic Consequence of Financial

question 23

Multiple Choice

Which of the following is not an economic consequence of financial reporting?

• A)Financial information can affect the distribution of wealth among investors.More informed investors,or investors employing security analysts,may be able to increase their wealth at the expense of less informed investors.
• B)Financial information can affect the level of risk accepted by a firm.Focusing on short-term,less risky projects may have long-term detrimental effects.
• C)Financial information can affect the rate of capital formation in the economy and result in a reallocation of wealth between consumption and investment within the economy.
• D)Financial information can affects the allocation of psychic income among investors.

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Definitions:

Financial Risks

Financial risks involve the potential loss of monetary investment or the possibility of not achieving the expected financial returns, affecting individuals or businesses.

Availability Heuristic

An intellectual quick route that depends on the readily recalled instances when contemplating a certain matter, notion, technique, or judgement.

Welfare Fraud

The act of illegally using or obtaining government assistance resources or funds by intentional misinformation or concealment of information.

Welfare Abuse

Misuse or exploitation of government assistance programs intended to help those in need.