Discuss Fundamental Analysis and Its Approaches to Estimating Share Prices

question 33

Essay

Discuss fundamental analysis and its approaches to estimating share prices.Explain the rationale for these approaches and assess their reliability.Illustrate your answer with some actual examples.

Recognize the importance of choosing appropriate alpha values in forecasting techniques.

Learn to use Excel Solver and other functions for optimizing forecasts.

Understand the concept of bias in forecasting and its implications.

Identify and calculate mean absolute deviation (MAD) as a measure of forecast error.

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Definitions:

Diminishing Marginal Utility

The principle that as a person consumes more of a product, there is a decline in the additional satisfaction or utility that person derives from consuming one more unit of the product.

Total Utility

The total satisfaction received by a consumer from consuming a particular quantity of goods or services.

Nth Unit

A term referring to the last or latest unit produced or consumed, often used in economics to analyze marginal costs or benefits.

Diminishing Marginal Utility

A principle stating that as a person consumes more of a good, the additional satisfaction gained from consuming an additional unit decreases.