Which of the Following Is a Criticism Made of Qualitative

question 20

Multiple Choice

Which of the following is a criticism made of qualitative forecasts?

• A) They become the only possible forecast when past data are either not available or are misleading.
• B) They provide no guidance on the likely effects of changes in explanatory variables.
• C) They are prone to biases such as optimism and overconfidence.
• D) They are difficult to document.

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Definitions:

Cost Constraint

The principle that the cost of providing financial information should not outweigh the benefits that the information provides to users.

Generating Revenue

The process by which a company produces income from its operations, sales, or services.

Consumed Assets

Assets that have been used and cannot be restored or recovered, typically expensed in the period they are used.

Services Used

Consumption of services in operations, such as consulting, maintenance, or legal services, recorded as expenses.