CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

Which relationship has a negative effect on a firm's market value of equity?
A. economic profit < normal profit
B. economic profit < accounting profit
C. normal profit > accounting profit
Explanation: In this case, the economic profit < 0.

User Contributed Comments 2

User Comment
gradyf Can someone explain this?
MariaDunet EP=AP-NP, so in case AP<NP, EP is definitely <0, which is a worse scenario of all above
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