Strategy Intermediate: Value Investing

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1.
Value investing is about measuring a companys past performance, not forecasting its future profits.
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False. Value investing is about measuring a companys capacity and potential for growth.
2.
Value investors identify variables that may push up the price of a value stock in the next two or three years.
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False. Value investors identify variables that may push up the price of a value stock in the near future.
3.
A value stock is one that is undervalued in the marketplace.
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True. A value stock is worth more than its current market price indicates.
4.
There are reasons why a low price-to-book ratio may not be a good thing for investors. Which of the following is not one of those reasons?
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The company is earning a high return on its assets. This is actually a good thing for investors.
5.
A company's book value is _______.
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The value of its assets minus liabilites. Book value is the value of a company's assets.