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1.
When astute investors see a particular news event influencing a stock's price to drop even though the company's fundamentals are still sound, what are they likely to consider doing?
Buying the stock. In this case, if the fundamentals are strong, this is a classic buying opportunity.
2.
Which of the following stock indexes is price-weighted?
Dow Jones Industrial Average. The Dow is price-weighted. The Nasdaq Composite Index and the SP 500 Index are market-cap-weighted.
3.
What is one reason to be wary of a lawsuit against a company whose stock you are considering buying?
Lawsuits tend to attract other lawsuits. This ultimately suggests not only monetary losses but perhaps also a waning interest in the product.
4.
What is an "earnings surprise"?
When a company's actual earnings results differ from what Wall Street's analysts expect. The actual earnings may be higher or lower. As a result, the company's stock price may rise or fall.
5.
If a company's actual earnings results are different from what analysts expect, this is known as _______.
An earnings surprise. An "earnings surprise" happens when a company's actual earnings results are different from what Wall Street's analysts expect. A stock split is when a company issues more shares to its shareholders, and the stock price falls to account for the ownership dilution.
