Which statement is true?
Financial statement do not reflect the economic cost, they are based on historical costs and book value and are not updated as per market condition. Year over year decrease in liabilities represents use of cash and not sources of cash. Stock with Beta of 1 would indicate systematic risk of market but does not cover the total risk of market portfolio as total risk is indicated based on standard deviation. Shareholders do not have prior claim on cash flow of corporation as prior claim is first of debt holders and at last of shareholders.
Thus, option (a), (b), (c) and (D) are all incorrect statement and thus option (E) is correct.
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