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Stocks 204: Start Thinking Like an Analyst

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1.
Determining the goal of a business is normally easy.
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False. Sometimes it is not easy, because a business might combine different objectives.
2.
What is an economic moat?
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A long-term competitive advantage that allows a company to earn oversized profits over time. A moat protects the business and does not let other businesses in.
3.
Which of the following questions will not likely help you analyze a business?
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None of the above. All of the above are good questions to ask in business analysis. There are hundreds more, of course. But these are a good start.
4.
In the terminology of economic moats, a concept developed by Warren Buffett, a moat can be described by which of the following terms?
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Both of the above. A moat has width and depth, and these characteristics help describe its value to the business.
5.
High switching costs help companies _______.
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Raise prices without the risk of losing customers.