Asked by Jacob Liscinsky on Jun 25, 2024
Verified
"Unbiased" means that,on average,the market's earnings expectations will be correct.
Unbiased
Free from bias; presenting a fair, objective representation of facts or information.
Market's Earnings Expectations
Investor anticipations or forecasts about a company's future earnings performance.
- Recognize the effect of market rationality and efficiency on share prices, considering forecasts of future earnings and cash flows.
Verified Answer
MN
Mahnoor NadeemJul 01, 2024
Final Answer :
True
Explanation :
Unbiased means that there is no systematic error or tendency towards over- or underestimation in the market's earnings expectations. In other words, the market's predictions will be correct on average, without any intentional or unintentional bias influencing the results. Therefore, option A is correct.
Learning Objectives
- Recognize the effect of market rationality and efficiency on share prices, considering forecasts of future earnings and cash flows.
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