CFA Practice Question

There are 191 practice questions for this study session.

CFA Practice Question

A justified price multiple is a price multiple at which the stock ______

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.
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