Which of the following statements is true?
A)Valuation is not an exact science.
B)The relative value of any asset is, at best, a lucky guess.
C)The true value of an asset is unaffected by externalities such as interest rate levels, the state of the economy, etc.
D)In finance, it is important to determine an asset's absolute value.

Question

Quizplus · Accepted Answer

Valuation involves making assumptions and subjective judgments, and therefore cannot be considered an exact science. Different analysts may arrive at different valuations for the same asset. Valuation involves making assumptions about future cash flows, discount rates, and other variables. These assumptions are subjective and can vary from person to person, making valuation an inexact science.

Which of the Following Statements Is True