Investment Analysts Use a Number of Approaches in the Analysis

question 42

Multiple Choice

Investment analysts use a number of approaches in the analysis of fundamentals that may affect share prices.Which of the following statements in relation to the top-down approach to share price analysis is MOST correct? The top-down approach:

• A) identifies specific firms to include in an investment portfolio.
• B) provides a measure of the level of unsystematic risk in the market.
• C) compares the performance of firms through financial ratio analysis.
• D) identifies future economic factors that may impact on industry sector performance.

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Definitions:

Confidence Limits

The upper and lower boundaries of a confidence interval, which estimate the range within which a population parameter lies with a certain level of confidence.

Population Mean

The average of all the values in a population, which is the total set of individuals, items, or data under study.

Sample Size

The number of observations or units included in a sample, which impacts the precision of statistical estimates.

Population Size

The total number of individuals or units in the group that a researcher or analyst is interested in studying.