1) The distribution of actual net income / market value is given below:

What is not true based on the figure: (only 1 right choice)

		A) The modal value (the most common outcome) for P/E ratio is between 10 and 20.
		B) Firms report positive net income more often than negative net income.
		C) On average net income is positive.
		D) Firms do not manage earnings to avoid losses.

2)

In non-GAAP earnings but not in GAAP earnings in earnings announcements which of the following is sometimes excluded ?

		A) Selling expenses.
		B) Research and Development expenses
		C) Stock-based compensation expenses
		D) Interest capitalized.

2000 1500 Frequency 1000 500 0 -25-20-15 -10.,05 -20 .25 30 35 .00 05.10.15 Earnings Interval