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1.
According to Ben Graham, where should we turn to find a business's intrinsic value?
The business's financial statements. The financial statements, especially the balance sheet and income statement, will provide information needed to find the business's intrinsic value.
2.
Which statement would Benjamin Graham most agree with?
"Investing is most intelligent when it is most businesslike." Since stocks represent partial ownership of real businesses, the same behavior that makes sense in the business world makes sense in the stock market.
3.
Which classic investment book did Benjamin Graham author?
The Intelligent Investor. Graham also wrote 'Security Analysis,' an earlier book.
4.
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.
5.
According to Benjamin Graham, what must an investor do before purchasing a stock?
Ensure the current price allows for a margin of safety. Graham thought it was absolutely critical to buy stocks or bonds only when prices offered a margin of safety. Otherwise, you would not be protected against unforeseen events that may lead to permanent capital loss.
