Strategy Intermediate: Value Investing

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1.
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.
2.
To evaluate a company, a value investor might look at _______.
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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 _______.
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Less than 1. Mathematically, it means less than 1.
4.
Which of the following best suggests that the price of an undervalued stock may soon increase?
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A corporate takeover is imminent. An investor may expect the takeover announcement to push up the price of the undervalued stock.
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.