The six principles of finance are:
A) (1) Money has a time value,(2) Rational investors focus on the highest return,(3) Diversification of investments can reduce risk,(4) Financial markets are efficient in pricing securities,(5) Manager and stockholder objectives may differ,and (6) Reputation matters.
B) (1) Money has a time value,(2) Higher returns are expected for taking on more risk,(3) Diversification of investments can reduce risk,(4) Financial markets are efficient in pricing securities,(5) Manager and stockholder objectives should always be the same,and (6) Reputation matters.
C) (1) Money has a time value,(2) Higher returns are expected for taking on more risk,(3) Diversification of investments can reduce risk,(4) Financial markets are efficient in pricing securities,(5) Manager and stockholder objectives may differ,and (6) Reputation matters.
D) (1) Money has a time value,(2) Higher returns are expected for taking on more risk,(3) Diversification of investments can reduce risk,(4) Financial markets are efficient in pricing securities,(5) Manager and stockholder objectives may differ,and (6) Competitive advantages are sustainable.
Correct Answer:
Verified
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