Reading 48: Market-Based Valuation: Price Multiples -LOS black, error, unexpected

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1.In interpreting the standardized unexpected earnings (SUE) momentum measure, it can be concluded that a given size forecast error is:

A)   less meaningful the smaller the historical size of forecast errors.

B)   scaled by the earnings surprise.

C)   more meaningful the smaller the historical size of forecast errors.

D)   more meaningful the larger the historical size of forecast errors.

2．Which of the following is NOT a common momentum valuation indicator?

A)   Earnings surprise.

B)   Standardized unexpected earnings.

C)   Relative strength.

D)   Dividend yield.

3．Which of the following is a common momentum valuation indicator?

A)   Dividend yield (D/P).

B)   Price to free cash flow to equity (P/FCFE).

C)   Relative strength.

D)   Price to book (P/B).

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答案和详解如下：

1.In interpreting the standardized unexpected earnings (SUE) momentum measure, it can be concluded that a given size forecast error is:

A)   less meaningful the smaller the historical size of forecast errors.

B)   scaled by the earnings surprise.

C)   more meaningful the smaller the historical size of forecast errors.

D)   more meaningful the larger the historical size of forecast errors.

The correct answer was C)

A given size forecast error is more (less) meaningful the smaller (larger) the historical size of forecast errors.

2．Which of the following is NOT a common momentum valuation indicator?

A)   Earnings surprise.

B)   Standardized unexpected earnings.

C)   Relative strength.

D)   Dividend yield.

The correct answer was D)

Dividend yield is not generally considered a momentum valuation indicator.

3．Which of the following is a common momentum valuation indicator?

A)   Dividend yield (D/P).

B)   Price to free cash flow to equity (P/FCFE).

C)   Relative strength.

D)   Price to book (P/B).

The correct answer was C)

Relative strength is generally considered a momentum valuation indicator.