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Stocks Intermediate:
Value Stocks
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1.
Value investors aim to buy several months after a turnaround in a stocks performance.
Choose wisely. There is only one correct answer.
True
False
False. Value investors aim to buy right before an expected turnaround in a value stocks performance.
2.
While all stocks might be undervalued at some time, investors watch for certain conditions that can help them find value stocks.
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True
False
True. There are certain conditions under which stocks may be undervalued.
3.
Stock from which of the following companies is most likely to be undervalued and might warrant additional research?
Choose wisely. There is only one correct answer.
A company that has undergone a prolonged decline
A company that has performed below average in its industry for several years
A company that has just reported its first drop in annual earnings in a decade
A company that is a strong performer in a prevailing bear market
A company that has just reported its first drop in annual earnings in a decade. The decline may be temporary.
4.
Investors are less likely to find value stocks in non-cyclical industries than in cyclical ones.
Choose wisely. There is only one correct answer.
True
False
True. Investors are less likely to find value stocks in stable industries that experience fewer highs and lows.
5.
A stock issued by a company with a large debt load is likely to be a value stock.
Choose wisely. There is only one correct answer.
True
False
False. A stock issued by a company with a large debt load may lack the resources to increase future earnings.
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