Analysis Beginner: Analyzing Investments

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1.
The main information source for fundamental analysis is the cash flow statement.
Choose wisely. There is only one correct answer.
False. The main information source for fundamental analysis is the balance sheet.
2.
Fundamental analysts determine a security's value by looking at its market price.
Choose wisely. There is only one correct answer.
False. Fundamental analysts determine a security's value by looking at the financial health of the company issuing the security.
3.
When investor expectations are high, the overall market will _______.
Choose wisely. There is only one correct answer.
Fall. When investor expectations are high, the overall market will fall.
4.
The main goal of security analysis is to _______.
Choose wisely. There is only one correct answer.
Calculate the real value of a security. The main goal of security analysis is to calculate the real value of a security.
5.
Which of the following are used in technical analysis?
Choose wisely. There is only one correct answer.
All of the above. Technical analysis uses charts, graphs, and indicators, among other tools.
6.
A high debt-to-equity ratio is an indicator of low risk.
Choose wisely. There is only one correct answer.
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.
7.
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.