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.

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Definitions:

Spending Variance

The difference between the actual and budgeted spending. It is used in budgetary control to identify discrepancies and manage costs.

Travel Expenses

Costs associated with traveling for the purpose of conducting business-related activities.

Customers Served

The total number of customers who have been provided with a product or service.

Spending Variance

The variance between the anticipated budget for expenses and the actual expenditure incurred.