1. Technical analysis is a tool, or method, used to predict the probable future price movement of a security. The key assumption underlying technical trading strategies is that:

Select one:

a. The share market is inefficient.

b. None of the given answers are correct.

c. The share market is efficient.

d. All the investors are making rational economic decisions.

2. Financial reporting is the disclosure of financial results and related information to management and external stakeholders. What is the basic feature of financial reporting?

Select one:

a. Application of social norms.

b. Comply with Big-bath theory.

c. All of the given answers are correct.

d. Comply with reporting standards.

3.The ability of a firm to meet long-term obligations will be measured by;

Select one:

a. Inventory turnover ratio.

b. Current ratio.

c. Gross profit ratio.

d. Debt to total asset ratio.

4. Which of the following financial statements will show information on issuing shares for cash?

Select one:

a. Statement of profit and loss and other comprehensive income.

b. Statement of cash flow.

5. A firm is likely to be a target if it has systematically underperformed its industry. This motivationfor merger is best described as?

Select one:

a. None of the given answers are correct.

b. Providing low-cost financing to target.

c. Capturing tax benefits.

d. Combining complimentary resources.

c. Statement of adjusted trial balance.

d. Statement of taxable income.

6.What is the disadvantage of accounting standards for financial statement analysis?

Select one:

a. They provide consistent information in a consistent format that enables investors to make comparisons between the financial performances and financial positions of the same firm over time.

b. They provide consistent information in a consistent format that enables investors to make comparisons between the financial performances and financial positions of different firms in the same period.

c. They can encourage managers to expend resources restructuring business activities and transactions in order to achieve a desired accounting result.

d. They reduce the reporting flexibility available to managers, to ensure that managers do not distort the financial statements for their own purposes.