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1.
According to Graham, what are the features of an investment operation?
Thorough analysis, safety of principal, and an adequate return. According to Graham, an investment operation must involve thorough analysis, safety of principal, and an adequate return; otherwise the operation is speculative.
2.
Which of the following best defines the term "intrinsic value"?
The true worth of a business, which is entirely separate from its stock market price. Intrinsic value is the true worth of a business, which is entirely separate from its stock market price. The intrinsic value of a business is based on its balance sheet net worth and/or future earnings power, not on what participants in the market are willing to pay.
3.
A business's intrinsic value is its stock market price.
False. The intrinsic value is its actual worth, which can be learned from its financial statements.
4.
According to Benjamin Graham, an investor should ensure a margin of safety when considering buying a stock.
True. The purpose of the margin is to protect against unforeseen events that could lead to loss.
5.
Famous investor Benjamin Graham viewed fluctuations in stock prices as _______.
Opportunities to buy and sell wisely. He cautioned against making too much worry out of price fluctuations.
