Which of the following statements is correct? O The fundamental value of the shares in a firm is determined by expected future profits and systematic risk. O If there is no new information regarding the future profitability or systematic risk of a firm, but its share price keeps rising, the fundamental value must be increasing. O If there is no new information regarding the future profitability or systematic risk of a firm, but its share price keeps rising, the fundamental value must be decreasing. O All investors always agree on the fundamental value of the shares in a firm.
Which of the following statements is correct? O The fundamental value of the shares in a firm is determined by expected future profits and systematic risk. O If there is no new information regarding the future profitability or systematic risk of a firm, but its share price keeps rising, the fundamental value must be increasing. O If there is no new information regarding the future profitability or systematic risk of a firm, but its share price keeps rising, the fundamental value must be decreasing. O All investors always agree on the fundamental value of the shares in a firm.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Which of the following statements is correct?
The fundamental value of the shares in a firm is determined by expected future profits and
systematic risk.
O If there is no new information regarding the future profitability or systematic risk of a firm, but
its share price keeps rising, the fundamental value must be increasing.
O If there is no new information regarding the future profitability or systematic risk of a firm, but
its share price keeps rising, the fundamental value must be decreasing.
O All investors always agree on the fundamental value of the shares in a firm.
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