14. Using fundamental analysis, if intrinsic value is greater than the market price per share (IV>MPPS) what decisions should be made by the following parties? Buyer а. Buy b. Buy c. Do not buy d. Do not buy Seller Sell Hold Hold Sel
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- . The word market as used in “the lower of cost or market” generally meansa. net realizable value.b. liquidation price.c. retail market price.d. original cost.QUESTION 1 What does HPR stand for? a. Holding Period Return O b. House Price Return O C. Holding Power Return O d. House Price RightsThe required rate of return on equity is the most appropriate discount rate to use when applying a ______ valuation model. A. FCFE B. DDM C. FCEF or DDM D. P/E E. FCEF
- [S1] Information traders can apply fundamental analysisto better assess the effect of the data gathered to thieinvestment prices. [S2] A good chartist does not need toapply fundamental analysis when deciding to acquireinvestments. a. Only S1 is true.b. Only S2 is true.c. Both are true.d. Both are false.Arbitrage Pricing Theory a. Explain the Concepts "Law of one Price" and "Opportunity Cost"Compute the goodwil (gain on bargain purchase)
- Explain the concept of “buy term and invest the difference (BTID).” a. Include in your explanation the merits and demerits of this concept. b. Do you think that this is a good idea or a bad one? a.Include in your explanation the merits and demerits of this concept. - Do you think that this is a good idea or a bad one?17 The majority of financial instruments are valued using: Group of answer choices fair value estimates. cost. lower of cost or market. realizable value.The bid-ask spread: a. Includes a transaction cost component to compensate liquidity providers for their operational costs b. Includes an adverse selection component to compensate liquidity providers for the risk of trading with informed traders c. Includes a bid-ask bounce component to compensate liquidity providers for volatility d. (a) & (b) e. (a), (b) & (c)
- 2. What’s the difference between the terms “intrinsic value” and “market price?” or in other words, what’s the difference between Value and Price?The semistrong-form of market efficiency states that O current market prices do not reflect any current information. O current market prices reflect all pertinent information, whether it is publicly available or privately held. O all information contained in past price movements is fully reflected in current market prices. O current market prices reflect all publicly available information, whether it is historical or newly released.The hypothesis that market prices reflect all publicly-available information is called efficiency in the: Strong form. Semi-strong form. Weak form.