Investment Analysts Use a Number of Approaches in the Analysis

question 35

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 bottom-up approach to share price analysis is MOST correct? The bottom-up approach:

• A) identifies the level of systematic risk within industry sectors.
• B) is applied to select specific firms from within desired industry sectors.
• C) indicates a well-diversified portfolio that eliminates unsystematic risk.
• D) provides investment indicators based on forecast financial ratios.