Stocks Intermediate: Value Stocks

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1.
Investors are less likely to find value stocks in non-cyclical industries than in cyclical ones.
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True. Investors are less likely to find value stocks in stable industries that experience fewer highs and lows.
2.
While all stocks might be undervalued at some time, investors watch for certain conditions that can help them find value stocks.
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True. There are certain conditions under which stocks may be undervalued.
3.
Which of the following is an example of a cyclical industry?
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Chemicals. The chemical industry tends to respond quickly to changes in the economy as a whole.
4.
A value stock is one that is overpriced, given the companys earnings, debt load, price-to-book-value ratio, and future growth prospects.
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False. A value stock is underpriced, given the companys earnings, debt load, price-to-book-value ratio, and future growth prospects.
5.
Of the following, the most likely external factor to trigger an expected turnaround in a value stocks performance is that _______.
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A respected economic forecaster predicts a boom in the companys industry. This would almost certainly benefit the company.