1.Valuation models for equities contain estimates of required returns and: A) expected future cash flows. B) known future cash flows. C) random values for future cash flows. D) an assumed continuation of past cash flows. The correct answer was A) Valuation models used for equities require the analyst to estimate the required return applicable to the investment and to develop an expectation of future cash flows. While cash flows for fixed-income investments are stated, no such definition is available for equities. 2.Which of the following is NOT a use of asset valuation? A) Issuing fairness opinions. B) Estimating inflation rates. C) Stock selection. D) Projecting the value of corporate actions. The correct answer was B) Asset valuation has many uses including stock selection, reading the market, projecting the value of corporate actions, issuing fairness opinions, and valuing private businesses. Asset valuation is not used to project inflation rates. 3.The goal of asset valuation, based on the expected future cash flows of an asset, is to establish an asset’s: A) relative value. B) intrinsic value. C) future value. D) market value. The correct answer was B) Asset valuation based on the expected future cash flows is utilized to estimate an asset’s intrinsic value, or the value derived from the asset's investment characteristics. 4.A wise analyst will examine a valuation to determine: A) its sensitivity to changes in expectations. B) how well it will be received by the firm's management. C) if it should be lowered to avoid risk to the analyst's reputation. D) ways to enhance a client's valuation. The correct answer was A) The results of valuation models can be very sensitive to changes in the expectations incorporated in the model. Analysis of a valuation’s sensitivity to the expectations and a review of the confidence the analyst has in the expectations may lead to the use of a valuation range rather than a pin-point value. 5.How can we account for different valuations for the same firm from several analysts even if they use the same required returns? A) Valuation models contain random errors. B) Valuations are based on the analyst's expectations. C) Mathematical errors are common in research reports. D) The analysts may be biased with personal opinions about management. The correct answer was B) Valuation is based on expectations of future cash flows rather than known values. Each analyst will build expectations of cash flows from the fundamental data and from other factors, internal and external, that the analyst believes will affect the firm’s performance. 6.Minority shareholders often do not have control of the price at which the firm will be sold or merged with another firm. In order to safeguard their interests, minority shareholders will often seek an analyst’s opinion of the value of the firm. This opinion is referred to as a: A) fairness opinion. B) minority opinion. C) second opinion. D) opposing opinion. The correct answer was A) Minority shareholders are often dependent upon an analyst's opinion about the fairness of a price to be received. Hence the term fairness opinion. | 
发表于 2008-4-14 12:23
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