CFA Practice Question

There are 57 practice questions for this study session.

CFA Practice Question

In which of the following situations would stock valuation not be a useful tool?
A. The CEO of the company will highlight in the annual shareholders' meeting how a new strategy implemented by the company will help to increase shareholders' wealth.
B. An equity analyst wants to know how much growth is reflected in the current market prices of individual companies in the industry if the industry is expected to grow at 8% next year.
C. An analyst wants to know by how much the mispricing of one stock will be corrected by the end of the year.
Explanation: Valuation helps to identify underpriced or overpriced stocks. However, it cannot indicate when and by how much the mispricing will be corrected.

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