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Funds 401: Shades of Value

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1.
Value fund managers buy stocks that they believe are undervalued, _______.
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But they also define value in different ways. And partly because they define value in different ways, they tend to use differing strategies when choosing stocks.
2.
Benchmarks used by relative-value managers include all but which of the following?
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Measures of absolute worth. Such measures are used by absolute-value managers, not relative-value managers.
3.
A value fund manager may sell a value stock once its price reaches some benchmark.
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True. To be fairly valued means to reach a benchmark of some kind.
4.
Value managers _______.
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Buy stocks that they believe are worth significantly more than the current price. Value managers buy stocks that they believe are undervalued.
5.
Absolute-value managers _______.
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Buy stocks that are cheaper than what they deem to be the company's entire worth. Managers practicing absolute-value strategies calculate what a company is worth in absolute terms and will only buy the company's stock for less than that figure.