Asked by
Himani Mehta
on Nov 07, 2024
Verified
AAR is biased in favour of liquid investments.
Average Accounting Return
A financial ratio that reflects the average net income of an investment compared to its average book value.
Liquid Investments
Assets that can be easily converted into cash with minimal impact on their value.
Biased
Demonstrating or exhibiting unfair or prejudiced perspectives, often leading to partial judgments or decisions.
- Acquire knowledge of the basic concepts behind average accounting return (AAR) calculations and their significance for investment strategy.
Verified Answer
WP
Learning Objectives
- Acquire knowledge of the basic concepts behind average accounting return (AAR) calculations and their significance for investment strategy.
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