The investment approach that focuses on the underlying determinants of future profitability rather than on past price movements of a company's stock is:
A) credit analysis.
B) fundamental analysis.
C) systems analysis.
D) technical analysis.

Question

Quizplus · Accepted Answer

Fundamental analysis involves examining the financial and economic factors that affect a company's future profitability, such as its revenue, earnings growth, and competitive position, as opposed to technical analysis, which relies on past price and volume data to predict future price movements. Credit analysis focuses on a company's creditworthiness and ability to repay debt, while systems analysis looks at how technology and systems support a company's operations.

The Investment Approach That Focuses on the Underlying Determinants of Future