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Basic Question 2 of 10
High earnings quality means:
B. Reporting earnings in a conservative way so they appear low.
C. None of the above.
A. Reporting high earnings.
B. Reporting earnings in a conservative way so they appear low.
C. None of the above.
User Contributed Comments 1
| User | Comment |
|---|---|
| Antoinepo | We want to have conservative ESTIMATIONS |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
describe the concept of sustainable (persistent) earnings;
describe indicators of earnings quality;
explain mean reversion in earnings and how the accruals component of earnings affects the speed of mean reversion;
CFA® 2025 Level II Curriculum, Volume 2, Module 14.