CFA Practice Question

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CFA Practice Question

Which statement is false?

A. A present value model is unlikely to use book value in its calculations.
B. Mispricing is more likely in securities closely followed by analysts.
C. An analyst estimating intrinsic value is implicitly questioning the market's estimated value.
Correct Answer: B

A is correct. A present value model uses future expected values such as dividends or cash.
B is incorrect (the opposite is true).
C is correct. The analyst is basically treating market prices with skepticism.

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