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1.
Which of the following factors is least likely to indicate a value stock?
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A low book value. A low book value indicates low net assets, which could have a negative impact on future earnings growth.
2.
Which of the following is the least likely internal factor to trigger a rise in the price of a value stock?
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Production employees strike for higher wages. Unless this problem can be solved quickly, it may threaten the companys prospects for growth.
3.
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.
4.
You can often find value stocks during a bear market but seldom during a bull market.
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False. You can find value stocks during either a bear market or a bull market.
5.
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.