A stock has an intrinsic value of $15 and an actual stock price of $13.50. You know that this stock

Related MCQs

• You want to earn a return of 10% on each of two stocks, A and B. Each of the stocks is expected to pay a dividend of $4 in the upcoming year. The expected growth rate of dividends is 6% for stock A and 5% for stock B. Using the constant-growth DDM, the intrinsic value of stock A _________.
• You are considering acquiring a common share of Sahali Shopping Center Corporation that you would like to hold for 1 year. You expect to receive both $1.25 in dividends and $35 from the sale of the share at the end of the year. The maximum price you would pay for a share today is __________ if you wanted to earn a 12% return.
• Fundamental analysis focuses on predicting the future price of a security and Technical analysis on estimating the intrinsic value of a security.
• Bill, Jim, and Shelly are all interested in buying the same stock that pays dividends. Bill plans on holding the stock for 1 year. Jim plans on holding the stock for 3 years. Shelly plans on holding the stock until she retires in 10years. Which one of the following statements is correct?
• If a stock is correctly priced, then you know that ____________.
• A portfolio comprises of two stocks A and B. Stock A gives a return of 8%and stock B Gives a return of 7%. Stock A has a weight of 60% in the portfolio. What is the Portfolio Return?
• This pattern occurs when a stock price drops to a similar price level twice within a few weeks or months.
• If you believe in the __________ form of the EMH, you believe that stock prices reflect all publicly available information but not information that is available only to insiders.
• Volatile stock has beta value
• The price of a T-bill today is $97 and its maturity value is $100. The maturity is 6 months from now.