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QUESTION 19 Bounded rationality suggests that: a. Professional managers cannot outperform a randomly selected stock portfolio b. Stock prices go up most of the time
QUESTION 19 Bounded rationality suggests that: a. Professional managers cannot outperform a randomly selected stock portfolio b. Stock prices go up most of the time c. Individuals have limited knowledge & limited ability to process information d. Investors make irrational decisions QUESTION 20 Income smoothing indicates that: a. Earnings management techniques cannot be analyzed by portfolio managers b. Earnings management is used to reduce erratic revenues & earnings c. Investors should concentrate on only a few, high performance stocks d. Markets are not efficient QUESTION 21 The Capital Asset Pricing Model describes: a. The relationship between individual security returns & market returns b. Portfolio irrationality & proves that markets are inefficient c. Earnings manipula on d. FASB s due process QUESTION 22 Low earnings quality is usually associated with: a. Earnings manipulation b. Conservative reporting c. Full disclosure d. Stable or growing earnings
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