Fundamental analysis is
A)the study of the relation between risk and return of stock portfolios.
B)the determination of the allocation of savings between stocks and bonds based on a person's degree of risk aversion.
C)the study of a company's accounting statements and future prospects to determine its value.
D)a method used to determine how adding stocks to a portfolio will change the risk of the portfolio.

Question

Quizplus · Accepted Answer

Fundamental analysis is the study of a company's accounting statements and future prospects to determine its value. It involves analyzing financial statements, economic indicators, industry trends, and other qualitative and quantitative factors to determine the intrinsic value of a company's stock. It is used to identify undervalued or overvalued stocks, to make investment decisions, and to predict future performance. Options A, B, and D relate to other financial concepts and are not related to fundamental analysis.

Fundamental Analysis Is