#1
What is the P/E ratio used for in stock valuation?
To assess a stock's relative value
ExplanationAssesses relative value
#2
What does the Price/Sales (P/S) ratio measure?
Valuation relative to revenue
ExplanationValuation relative to revenue
#3
Which financial metric is used to assess a company's efficiency in utilizing its assets to generate sales?
Asset Turnover Ratio
ExplanationEfficiency in asset utilization for sales
#4
What is the purpose of the Sharpe Ratio in investment analysis?
To assess the risk-adjusted return of an investment
ExplanationAssesses risk-adjusted return
#5
What does the term 'Market Capitalization' represent in stock valuation?
Total market value of a company's outstanding shares
ExplanationTotal market value of outstanding shares
#6
Which financial statement is crucial for analyzing a company's profitability?
Income statement
ExplanationCrucial for profitability analysis
#7
What does the Gordon Growth Model (Dividend Discount Model) estimate?
Intrinsic value of a stock
ExplanationEstimates intrinsic value
#8
In the context of stock valuation, what does the term 'Beta' represent?
The volatility of a stock relative to the market
ExplanationVolatility relative to market
#9
Which financial ratio indicates a company's ability to meet short-term liabilities with its short-term assets?
Current ratio
ExplanationShort-term liabilities covered by short-term assets
#10
What does the Earnings Yield indicate in the context of stock valuation?
The inverse of the Price/Earnings (P/E) ratio
ExplanationInverse of P/E ratio
#11
What is the formula for the Return on Equity (ROE) ratio?
Net Income / Shareholder's Equity
ExplanationNet income over shareholder's equity
#12
Which investment analysis approach involves studying charts and patterns to predict future stock price movements?
Technical analysis
ExplanationCharts and patterns for predictions
#13
What is the primary focus of the Dividend Discount Model (DDM) in stock valuation?
Dividend payments
ExplanationFocuses on dividend payments
#14
In the context of investment analysis, what does the term 'Margin of Safety' refer to?
The difference between market price and intrinsic value
ExplanationDifference between market price and intrinsic value
#15
What is the primary purpose of conducting a SWOT analysis in the context of stock investment?
To evaluate a company's internal strengths and weaknesses
ExplanationEvaluates internal strengths and weaknesses