In Which of the Following Strategies for Investing Do Investors

question 108

Multiple Choice

In which of the following strategies for investing do investors buy low-risk securities, thereby getting a relatively low return because the market value of low-risk securities seldom increases much over time?

• A) Buying and holding
• B) Value investing
• C) Investing for growth
• D) Investing for income

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Definitions:

Book Value

The net value of an asset as recorded on the balance sheet, calculated by deducting the accumulated depreciation or amortization from the original cost of the asset.

Fair Market Value

The price an asset would sell for on the open market when certain conditions are met, such as both the buyer and seller are knowledgeable, willing, and not under duress.

Goodwill

An intangible asset that arises when a company acquires another business for more than the fair value of its identifiable assets and liabilities.

Liabilities

Financial obligations or debts that a business owes to others, including loans, accounts payable, and mortgages.