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Stocks 204: Start Thinking Like an Analyst

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1.
Which of the following questions will not likely help you analyze a business?
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None of the above. All of the above are good questions to ask in business analysis. There are hundreds more, of course. But these are a good start.
2.
High switching costs help companies _______.
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Raise prices without the risk of losing customers.
3.
Which of these companies best exemplifies the use of the network effect?
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EBay. eBay is the quintessential example of a company with a strong network effect.
4.
Why are economic moats advantageous?
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They allow a company to generate profits and keep competitors at bay. Companies that reward investors over the long haul are those that have a durable competitive advantage.
5.
Determining the goal of a business is normally easy.
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False. Sometimes it is not easy, because a business might combine different objectives.