Analysis Beginner: Analyzing Investments

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1.
Fundamental analysts determine a security's value by looking at its market price.
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False. Fundamental analysts determine a security's value by looking at the financial health of the company issuing the security.
2.
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.
3.
When securities prices reach the support level, they will probably _______.
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Go up. At the support level, a downward trend might reverse itself.
4.
Most stock prices trade within historical price ranges.
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True. Most stock prices trade within historical price ranges.
5.
To a technical analyst, every aspect of a market is revealed through _______.
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Market movement. Technical analysts study the movement of the whole market.
6.
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.
7.
A high debt-to-equity ratio is an indicator of low risk.
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False. A high debt-to-equity ratio is an indicator of high risk. It means the company is carrying a lot of debt relative to equity.