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Equity Quiz

A manager buys a particular stock as long as the market price of that stock is less than its intrinsic value calculated using DCF model. What type of investor the manager is?

A. Value
B. Growth
C. Market-Oriented

C I hated this question on the sample exam.



Edited 1 time(s). Last edit at Wednesday, May 25, 2011 at 03:35PM by Paraguay.

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which exam is this from?

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It is C and I too hated this question. The worst of it is that I didn't like the explanation.

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C he will buy any stock no matter it is value or stock and just based on intrinsic value

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looks like a pretty fair/easy question,
-as it states he will buy any stock if its undervalued using a DCF model, therefore the stock could be value (low P/E, high div...) or growth (high P/E, low div yield..) therefore you only left with market, as any of these ca be undervalued using a DCF
unless im missing something

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Not cool CFAI, not cool.



Edited 1 time(s). Last edit at Wednesday, May 25, 2011 at 06:27PM by sbmarti2.

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