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Strategy Intermediate: Value Investing

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1.
There are reasons why a low price-to-book ratio may not be a good thing for investors. Which of the following is not one of those reasons?
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The company is earning a high return on its assets. This is actually a good thing for investors.
2.
A value stock is issued by a company that _______.
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Has the resources to grow. A careful review reveals that it will likely grow in the future, even during economic downturns.
3.
To evaluate a company, a value investor might look at _______.
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Its book value. A value investor would focus on factors intrinsic to the company to determine its likely future performance.
4.
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.
5.
Value investors identify variables that may push up the price of a value stock in the next two or three years.
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False. Value investors identify variables that may push up the price of a value stock in the near future.