Finance Quiz 14July

What is fundamental analysis?

• A method to predict stock prices based on historical prices

• • Analysing the intrinsic value of a stock based on economic, financial, and other qualitative and quantitative factors

• • A technique to identify patterns in stock charts

•  Using past trading volumes to predict future prices

What does EPS stand for in stock market terminology?

• • Earnings Per Share

• • Equity Per Share

• •  Expenses Per Share

• •  Earnings Performance Standard

The Price-to-Earnings (P/E) ratio is used to measure what?

• • The profitability of a company

• • The current share price relative to its earnings per share

• • The company's total revenue

• • The company's net profit

What does the term 'dividend yield' refer to?

• •  The ratio of dividends paid out to shareholders relative to the company's net income

• • The percentage of a company's earnings distributed to shareholders in the form of dividends

• • The annual dividend payment divided by the current stock price

• • The total dividends paid out over a period divided by the number of outstanding shares

Which ratio measures a company’s ability to pay short-term obligations?

• • Debt-to-Equity Ratio

• • Current Ratio

• • Price-to-Earnings Ratio

• •  Return on Equity

What is the significance of the Return on Equity (ROE) ratio?

• • It measures the company's profitability from shareholders' equity

• • It shows the company’s ability to pay off long-term debt

• • It indicates the company’s market valuation

• • It reflects the company’s operational efficiency

Which ratio is commonly used in fundamental analysis to evaluate a company's profitability?

• • Debt-to-Equity Ratio

• • Current Ratio

• •  Return on Assets (ROA)

• •  Price-to-Earnings (P/E) Ratio

In fundamental analysis, what does a high Price-to-Earnings (P/E) ratio typically indicate?

• • The stock is undervalued

• The stock is overvalued

• The company has high debt

• •  The company is highly profitable

Which of the following factors is most likely to be analyzed in fundamental analysis to assess a company's future growth potential?

• • Historical stock price movements

• • Company's earnings projections

•  Trading volume trends

• • Technical indicators

In fundamental analysis, what does the term 'free cash flow' refer to?

• •  The cash generated from operating activities

• • The cash available after deducting capital expenditures from operating cash flow

• • The net income of the company

• • The total revenue minus expenses