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Questions and Answers
Which statement accurately describes the relationship between main diagonal probabilities and the investor's ability to predict future firm performance?
Which statement accurately describes the relationship between main diagonal probabilities and the investor's ability to predict future firm performance?
- There is no relationship between main diagonal probabilities and the investor's ability to predict future firm performance
- The higher the main diagonal probabilities, the better the investor can predict future firm performance (correct)
- The main diagonal probabilities have no impact on the investor's ability to predict future firm performance
- The higher the main diagonal probabilities, the worse the investor can predict future firm performance
What do the main diagonal probabilities capture?
What do the main diagonal probabilities capture?
- Future firm performance
- Financial statement informativeness (correct)
- Investor predictions
- Investment opportunities
What are highly informative financial statements also called?
What are highly informative financial statements also called?
- Precise
- Transparent (correct)
- High quality
- Inaccurate
