Choose wisely. There is only one correct answer to each question.
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1.
Famous investor Benjamin Graham's 'Mr. Market' character could best be described as _______.
Temperamental. Mr. Market often (but not always) operates according to emotion, like many investors do.
2.
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.
3.
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.
4.
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.
5.
According to Benjamin Graham, why should investors use a 'margin of safety' when settling on a price to pay for a company's stock?
The estimates of the stock's intrinsic value are not likely to be completely accurate. Because it involves so many assumptions, such estimates are not likely to be completely accurate. Thus the need for a margin of safety.
