The Investment Approach That Focuses on the Underlying Determinants of Future

question 74

Multiple Choice

The investment approach that focuses on the underlying determinants of future profitability rather than on past price movements of a company's stock is:

• A) credit analysis.
• B) fundamental analysis.
• C) systems analysis.
• D) technical analysis.

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Definitions:

Consumption

The act of using goods and services for personal use, often considered in economic terms as an indicator of economic health.

Disposable Income

Fiscal space for households' spending and saving maneuvers after settling income taxes.

MPS

Marginal Propensity to Save, which measures the fraction of additional income that is saved rather than spent on consumption.

Saving

The act of setting aside a portion of current income for future use, either by holding it as cash or putting it into investment accounts.