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LOS h: Explain the rationales and primary concerns of value investors and growth investors and discuss the key risks of each investment style.
Q1. Which of the following is a justification of a value investing strategy?
A) Current depressed earnings will rise in the future as they revert to the mean.
B) The value of stock is volatile so a cheaply priced stock will see an increase in value in the future.
C) The investor can add value using proper analysis of the risky firm.
Q2. The risk for growth investors is that the expected earnings growth does not occur. How will this low growth affect the price-multiple and stock prices, respectively?
A) Decrease; decrease.
B) Increase; decrease.
C) Decrease; increase.
Q3. Which of the following statements about value and growth investors is least accurate?
A) Value investors focus on the numerator of the P/E ratio while growth investors focus on the denominator.
B) Growth investors may do better during an economic contraction than during an expansion.
C) Growth investors seek industries where low expected earnings growth will drive the stock price down. | 
发表于 2009-3-6 17:42
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