Final answer:
The statement regarding forecast starting points including key measures like sales growth, earnings, and ROA is true. These measures, along with market expectations, are crucial in financial forecasting and determining stock prices. Expectations about future performance can greatly influence stock prices, irrespective of current earnings or ROA. The correct option is A.
Step-by-step explanation:
The statement that the starting point for forecasts should include key measures such as sales growth, earnings, and Return on Assets (ROA) is true.
These financial indicators are critical when analyzing a company's performance and projecting its future value. When making forecasts, especially in the context of the stock market, it is essential to consider not only these financial measures but also the market expectations and analysts' predictions.
The underlying principle is that the stock prices are largely driven by investors' and analysts' expectations about future company performance. This implies that even if the actual earnings or ROA are not high at present, a company with perceived poor prospects can see an increase in stock price if it is anticipated to perform remarkably better in the future.
Hence, the shift in expectations becomes a significant factor in determining future stock prices. This reflects the importance of conducting thorough research and analysis to have informed expectations that can lead to better investment decisions.