Analysis Beginner: Analyzing Investments

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Cash flow measures the difference between total cash received and used.
Choose wisely. There is only one correct answer.
True. Cash flow measures the difference between total cash received and used.
2.
Security analysis is the process of _______.
Choose wisely. There is only one correct answer.
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.
3.
Technical analysts rely heavily on company balance sheets to predict price movements.
Choose wisely. There is only one correct answer.
False. Technical analysts do not use any fundamental company information, such as balance sheets, to make their predictions.
4.
When a stock's market price is higher than its intrinsic value, a fundamental analyst _______.
Choose wisely. There is only one correct answer.
Sells it. When a stock's market price is higher than its intrinsic value, it is overvalued, and a fundamental analyst sells it.
5.
A _______ chart is used to track a stock's price momentum.
Choose wisely. There is only one correct answer.
Point. A point chart is used to track a stock's price momentum.
6.
If prices rise above a consolidation line, future security prices will probably fall.
Choose wisely. There is only one correct answer.
False. If prices rise above a consolidation line, future security prices will probably rise.
7.
What ratio measures the difference between a company's assets and liabilities?
Choose wisely. There is only one correct answer.
Current ratio. Current ratio measures the difference between a company's assets and liabilities.