Analysis Beginner: Analyzing Investments

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1.
When a stock's market price is higher than its intrinsic value, a fundamental analyst _______.
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Sells it. When a stock's market price is higher than its intrinsic value, it is overvalued, and a fundamental analyst sells it.
2.
When investor expectations are high, the overall market will _______.
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Fall. When investor expectations are high, the overall market will fall.
3.
Security analysis is the process of _______.
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Researching and evaluating the factors that influence a securitys value. Using ratios is one part of this analysis, and getting the best possible prices for stocks is one of its many goals.
4.
Which of the following are used in technical analysis?
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All of the above. Technical analysis uses charts, graphs, and indicators, among other tools.
5.
Cash flow measures the difference between total cash received and used.
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True. Cash flow measures the difference between total cash received and used.
6.
If prices rise above a consolidation line, future security prices will probably fall.
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False. If prices rise above a consolidation line, future security prices will probably rise.
7.
Which of the following does not measure stock value?
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Net profit margin. Net profit margin does not measure stock value. The other two do, in different ways.