- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 8. Equity Valuation: Concepts and Basic Tools
- Subject 5. Multiplier Models
CFA Practice Question
A justified price multiple is a price multiple at which the stock ______
B. should be fairly valued based on the method of comparable or forecasted fundamentals.
C. is expected to trade for the next 4 quarters.
A. has traded for the past 4 quarters.
B. should be fairly valued based on the method of comparable or forecasted fundamentals.
C. is expected to trade for the next 4 quarters.
Correct Answer: B
User Contributed Comments 3
| User | Comment |
|---|---|
| farhan92 | A =Trailing B= Leading |
| fabsan | wrong C = leading/ since A and C are contracdictory, B should be right |
| khalifa92 | Common criticism is multiples don't consider the future, counter criticism by forecasting the variables; justified price is extracted from forecasted fundamentals. |