Asked by Mohamed Araye on Apr 24, 2024
Verified
Which of the following is(are) used to develop a stock's intrinsic value?
A) Fundamental analysis
B) Assumptions about future cash flows
C) Technical analysis
D) Both a and b
E) All of the above
Fundamental Analysis
An investment analysis approach that evaluates a security's intrinsic value by examining related economic and financial factors.
Intrinsic Value
The actual value of a company or an asset based on underlying perceptions of its true value including all aspects of the business.
- Identify factors that contribute to a stock's intrinsic value and the role of fundamental analysis.
Verified Answer
AA
Aerikka Alaurin7 days ago
Final Answer :
D
Explanation :
Fundamental analysis is used to evaluate a company's financial information and other qualitative factors to determine an intrinsic value of a stock. Assumptions about future cash flows are also taken into account while evaluating the intrinsic value. Technical analysis is not used to evaluate the intrinsic value of a stock. Therefore, options A and B are correct while C is incorrect, making option D the correct choice. Option E is incorrect as technical analysis is not used for developing intrinsic value.
Learning Objectives
- Identify factors that contribute to a stock's intrinsic value and the role of fundamental analysis.
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