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      Question

      Which type of analysis involves comparing the financial

      ratios of different firms at the same point in time?
      A Time-series Correct Answer Incorrect Answer
      B Cross-sectional Correct Answer Incorrect Answer
      C Marginal Correct Answer Incorrect Answer
      D Quantitative Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Cross-sectional analysis involves the comparison of a firm’s ratios with that of some other selected firms in the same industry or the industry average at the same point of time. Such a comparison is very helpful in assessing the relative financial position and performance of the firm.

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