Which of the following statements is NOT true concerning reasons for analyzing foreign financial statements?
A)It is important to determine the financial stability of foreign suppliers.
B)The stock returns of foreign corporations are nearly perfectly correlated with returns on U.S.stocks.
C)In a global economy, managers may use foreign competitors as benchmarks for evaluating performance.
D)Managers should determine the financial health of foreign customers before extending credit.

Question

Quizplus · Accepted Answer

The statement that stock returns of foreign corporations are nearly perfectly correlated with returns on U.S. stocks is not true. While global markets may influence each other to some extent, there are many factors, such as economic and political conditions and exchange rates that can cause significant differences between stock returns of companies from different countries.

Which of the Following Statements Is NOT True Concerning Reasons