Question

. Under the top-down approach, you evaluate the __________, ___________, and ___________ in that order.

1. Charts, Financial Statements, Ratios
2. Financial Statements, Economy, Charts
3. Economy, Industry, Company
4. Industry, Financial Statements, Economy

The most important ratio for evaluating the performance of the perform (but NOT its stock price) is the firm’s __________.

1. DPS
2. PE
3. ROE
4. TIE

If the market is NOT weak-form efficient, then it is possible to beat the market using ____________.

1. Fundamental Analysis
2. Insider Trading
3. Technical Analysis
4. All of the Above

Answer 1

Under the top-down approach, you evaluate the Economy, Industry and Company in that order.

Explanation:

In top down approach, firstly the economy is analyzed then the industry which is performing in that economy and after that companies are analyzed for good investment opportunity in that industry.

The most important ratio for evaluating the performance of the perform (but NOT its stock price) is the firm’s ROE

Explanation:

ROE = Net Profit/Equity

ROE shows how much profit the company is generating over it's shareholder's equity.

If the market is NOT weak-form efficient, then it is possible to beat the market using all of the above

Explanation:

In weak form market efficiency it is not possible to generate excess return from past price, volume, as market is not weak form, excess returns can be generated.