There Are Three Techniques Available to Help an Investor Make

question 46

Multiple Choice

There are three techniques available to help an investor make a market decision.Which of the following is not such an analysis technique?

• A) Macro techniques that are based on the strong relationship between the economy and security markets.
• B) Micro techniques that estimate future market values by applying one of several basic valuation models to equity markets.
• C) Technical analysis where an investor analyzes past and recent market movements for indications of future performance.
• D) Fundamental analysis that considers the effect of market on the entire portfolio.
• E) None of the above (that is, all are techniques available to make market decisions)

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Definitions:

Historical Cost

The original monetary value of an asset or investment, not adjusted for inflation or changes in market value.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting and investment appraisal.

Maturity Value

The amount due to be paid at the end of a financial instrument's term, including both the principal and any accrued interest.

Stated Interest Rate

The interest rate specified on a loan or investment agreement, not accounting for compounding or fees.