In an efficient market, fundamental analysis still provides value to an investor.

Question

Quizplus · Accepted Answer

Fundamental analysis involves analyzing a company's financial and economic factors, such as revenue, earnings, balance sheets, and market trends, to determine its intrinsic value. In an efficient market, where all available information is reflected in a stock's price, fundamental analysis can still provide value to investors by identifying undervalued or overvalued stocks. This is because not all market participants have the same level of access to information or analytical skills, leading to mispricing that can be exploited through fundamental analysis.

In an Efficient Market, Fundamental Analysis Still Provides Value to an Investor