A top-down analysis of a firm's prospects starts with

A) an examination of the firm's industry.
B) an evaluation of the firm's position within its industry.
C) a forecast of interest-rate movements.
D) an assessment of the broad economic environment.
E) the application of the CAPM to find the firm's theoretical return.

Top-Down Analysis

An investment analysis approach that starts with the broader economy before drilling down to sector and individual company analysis.

Broad Economic Environment

Refers to the overall conditions affecting economic activity, including monetary policy, fiscal policy, and external factors like global markets.

Interest-Rate Movements

Changes in the interest rate level determined by central banks that affect borrowing costs, investment returns, and economic activity across various sectors.