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.
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.
Which of the following is an example of a non-cyclical industry?
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Health care. This industry tends to react less to economic changes than many cyclical industries do.
4.
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.
5.
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.