D$.$ Investment Cash Flow

$22.$ When analysing the quarterly earnings data, the analyst should pay special attention to

A$.$ The seasonality

B$.$ Most recent quarter earnings

C$.$ Lone$-$term change in earnings

D$.$ The long$-$term average of earnings

$23.$ Which of the following represents the prediction of future abnormal eamings using an autoregressive model?

A$.$ Forecasted Abnormal Earnings $=$ Current Abnormal Earnings

B$.$ Forecasted Abnormal Earnings $=b$ Current Abnormal Earnings

C$.$ Forecasted ROE $=$ Current ROE $-b($Current ROE $+$ Steady State ROE$)$

D$.$ Forecasted ROE $=$ Current ROE $+b($Current ROE $-$ Steady State ROE$)$

$24.$ Leaving all other factors constant, generating a positive Net Income with higher financial leverage ratio, will lead to

A$.$ Lower ROA

B$.$ Higher ROE

C$.$ Higher ROA

D$.$ Higher Spread

$25.$ Which of the following statements is INCORRECT about the return on equity behaviour?

A$.$ Firms with abnormally high ROEs tend to experience earnings declines

B$.$ Firms with abnormally low ROEs tend to experience earnings increases

C$.$ Firms with abnormally ROEs tend to maintain their current earnings level

D$.$ Firms with higher ROEs tend to expand their investment bases more quickly than others

$3$