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It Has Been Found That Prices Often Lead Earnings

Question 10

Multiple Choice

It has been found that prices often lead earnings.Why is this thought to be the case:


A) Accounting recognition criteria are less stringent for losses than for gains.
B) Accounting conservatism 'garbles' earning signals about firm value.
C) Accounting statements are poor at incorporating information about human capital and other intangibles.
D) All of the above.

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