Strategy Intermediate: Value Investing

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.
A value stock is issued by a company that _______.
Choose wisely. There is only one correct answer.
Has the resources to grow. A careful review reveals that it will likely grow in the future, even during economic downturns.
2.
To evaluate a company, a value investor might look at _______.
Choose wisely. There is only one correct answer.
Its book value. A value investor would focus on factors intrinsic to the company to determine its likely future performance.
3.
A low price-to-book (P/B) ratio means _______.
Choose wisely. There is only one correct answer.
Less than 1. Mathematically, it means less than 1.
4.
Value investing is about measuring a companys past performance, not forecasting its future profits.
Choose wisely. There is only one correct answer.
False. Value investing is about measuring a companys capacity and potential for growth.
5.
Which of the following best suggests that the price of an undervalued stock may soon increase?
Choose wisely. There is only one correct answer.
A corporate takeover is imminent. An investor may expect the takeover announcement to push up the price of the undervalued stock.