Which of the following statements about industry analysis is true?
A) During any time period, rates of return of firms within industries do vary within a wide range.
B) Aggregate market performance accurately reflects the performance of alternative industries.
C) Risk of return for individual industries have not varied over time, so one can simply extrapolate past performance into the future.
D) All of the above are true.
E) None of the above are true.

Question

Quizplus · Accepted Answer

Rates of return of firms within industries do vary within a wide range, making it important to analyze industries individually rather than relying solely on aggregate market performance. Option B is incorrect because aggregate market performance does not accurately reflect the performance of alternative industries. Option C is incorrect as risk of return for individual industries can vary over time and cannot be simply extrapolated from past performance.

Which of the Following Statements About Industry Analysis Is True