Choose wisely. There is only one correct answer to each question.
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1.
According to Peter Lynch's classification system for companies, a company that has been beaten down might soon rise again. What kind of company would this be?
Turnaround. Of course, it may not turn around at all, but if it does, its momentum will likely be tied to the overall market.
2.
What three fundamental criteria did Peter Lynch use to evaluate a stock?
Profits, business model, and current stock price. Lynch looked for profitable companies with solid business models selling at good prices. He was willing to pay more for those companies than other managers might have paid, and he tolerated debt as long as the profits were there and the business model was right.
3.
Peter Lynch believed investors should invest for the short term so that they do not lose money.
False. He believed in long-term investing and ignoring short-term movements in the market.
4.
Companies whose sales and profits rise and fall in a regular fashion are called _______.
Cyclicals. The cyclicals tend to be predictable.
5.
Peter Lynch's investment style is best described as what?
Opportunistic. Lynch took ideas from many different investment philosophies. He went wherever he thought the best opportunities were.
