One of the Basic Premises of Security Analysis, and in Particular

question 113

Multiple Choice

One of the basic premises of security analysis, and in particular fundamental analysis, is that

• A) a stock's price is based on its past cash flows rather than on anticipated future cash flows.
• B) market sectors do not move in concert with business cycles.
• C) all securities have an intrinsic value that their market value will approach over time.
• D) a security's risk has relatively little effect on the security's return.