The process of fundamental valuation requires estimates of all the following factors, except
A) the time pattern of returns.
B) the economy's real risk-free rate.
C) the risk premium for the asset.
D) the times series of stock prices.
E) the expected rate of inflation.

Question

Quizplus · Accepted Answer

The time series of stock prices is not a factor that needs to be estimated in the process of fundamental valuation. The other factors listed - time pattern of returns, real risk-free rate, risk premium for the asset, and expected rate of inflation - are all important inputs in determining the intrinsic value of an asset.

The Process of Fundamental Valuation Requires Estimates of All the Following