Stocks Intermediate: Value Stocks

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1.
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.
2.
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.
3.
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.
4.
Value investors aim to buy several months after a turnaround in a stocks performance.
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False. Value investors aim to buy right before an expected turnaround in a value stocks performance.
5.
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.