Which one of the following factors makes it difficult for financial analysts to use trend analysis? Multiple Choice Decreasing costs and prices. Deflation. An aging asset base. A relatively new asset base.
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Which one of the following factors makes it difficult for financial analysts to use trend analysis?
Multiple Choice
-
Decreasing costs and prices.
-
Deflation.
-
An aging asset base.
-
A relatively new asset base.
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- Which of the following statements represent a weakness or limitation of ratio analysis? Check all that apply. Seasonal factors can distort data. Market data is not sufficiently considered. Window dressing might be in effect.For researchers to consider an investment strategy to have delivered abnormal returns, it must have exceeded the return on its benchmark plus: the return on the risk-free asset. transaction costs and the highest marginal income tax rate. transaction costs and information acquisition costs. All of the above answers are correct. None of the above answers are correct.The pricing efficiency of financial markets can be expected to decrease if the cost of skillful financial analysis increases. True False
- Which of the following are not assumptions of technical analysis? All information is already included in prices History tends to repeat itself Even random market price movements move in identifiable patterns and trends that repeat over time Fundamental analysis is inherently flawed and thus not usefulA common approach of estimating the variability of returns involving forecasting the pessimistic, most likely, and optimistic returns associated with the asset is called A. marginal analysis. B. sensitivity analysis. C. break-even analysis. D. financial statement analysis.Relative valuation has several disadvantages. Which of the following is NOT? a. There is the potential to provide inconsistent estimates arising from using different price ratios. b.Relative valuation is affected by the market mood such as when the comps is overvalued, the resulting valuation of the object will be a lower estimate. c. When applying relative valuation, the analyst may remove nonrecurrring income and loss items such as loss from sale of a cash-generating unit; this will improve the valuation process at the expense of time required.d.When biased stock brokers prepare relative valuation reports, it is likely that they will choose a price ratio that will encourage investors to buy stocks.
- If the weakest form of market efficiency holds, then security prices reflect all information found in past prices and volume. Thus, traditional "technical analysis" will not work. Group of answer choices True FalseDoes the use of universes of managers with similar investment styles to evaluate relative investment performance overcome the statistical problems associated with instability of beta or total variability?What happens with situations like Covid where we cannot predict future financials based on past performance metrics?
- Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same?Which of the following is false about diversification? Select one or more: a. diversification only works when returns on investments move in different ways b. diversification results in higher Sharpe ratios c. diversification reduces risk d. diversification eliminates riskWhat type of qualitative issues should management consider if a quantitative analysis reveals that a segment should be dropped?
