Stocks Intermediate:
Value Stocks
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.
Stock from which of the following companies is most likely to be undervalued and might warrant additional research?
Choose wisely. There is only one correct answer.
A company that has undergone a prolonged decline
A company that has performed below average in its industry for several years
A company that has just reported its first drop in annual earnings in a decade
A company that is a strong performer in a prevailing bear market
A company that has just reported its first drop in annual earnings in a decade. The decline may be temporary.
2.
Which of the following is an example of a non-cyclical industry?
Choose wisely. There is only one correct answer.
Automobiles
Paper
Health care
Machinery
Health care. This industry tends to react less to economic changes than many cyclical industries do.
3.
Which of the following factors is least likely to indicate a value stock?
Choose wisely. There is only one correct answer.
A new management team
A low price-to-book-value
A low book value
New product patent approvals
A low book value. A low book value indicates low net assets, which could have a negative impact on future earnings growth.
4.
Value investors aim to buy several months after a turnaround in a stocks performance.
Choose wisely. There is only one correct answer.
True
False
False. Value investors aim to buy right before an expected turnaround in a value stocks performance.
5.
Of the following, the most likely external factor to trigger an expected turnaround in a value stocks performance is that _______.
Choose wisely. There is only one correct answer.
Interest rates are about to rise
A combination of economic factors forecasts a general economic downturn
New, stringent clean-air requirements that will affect the companys emissions procedures are announced
A respected economic forecaster predicts a boom in the companys industry
A respected economic forecaster predicts a boom in the companys industry. This would almost certainly benefit the company.
Submit
DONE