Question
QUESTION 11.4 CHOOSE THE CORRECT ANSWER(S)Which of the following statements is correct? A. The fundamental value of the shares in a firm is determined by
QUESTION 11.4CHOOSE THE CORRECT ANSWER(S)Which of the following statements is correct?
A. The fundamental value of the shares in a firm is determined by expected future profits and systematic risk.
B. If there is no new information regarding the future profitability or systematic risk of a firm, but its share price keeps rising, the fundamental value must be increasing.
C. Buying a share at a price above its fundamental value in the hope that someone else would buy it from you at an even higher price is guaranteed to lose money.
D. All investors always agree on the fundamental value of the shares in a firm.
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