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1.
Value investors aim to assess a stock based on its historical performance in the market.
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False. Value investors aim to assess a stock based on the companys strengths and prospects, independent of the stocks performance.
2.
Value investing is about measuring a companys past performance, not forecasting its future profits.
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False. Value investing is about measuring a companys capacity and potential for growth.
3.
A company's book value is _______.
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The value of its assets minus liabilites. Book value is the value of a company's assets.
4.
Which of the following best suggests that the price of an undervalued stock may soon increase?
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A corporate takeover is imminent. An investor may expect the takeover announcement to push up the price of the undervalued stock.
5.
To evaluate a company, a value investor might look at _______.
Choose wisely. There is only one correct answer.
Its book value. A value investor would focus on factors intrinsic to the company to determine its likely future performance.