Easily Justified

CFA Level II
#1

A justified price multiple is the: A) multiple implied by the market price. B) multiple implied by historical growth. C) warranted price multiple. D) unfair multiple implied by misvaluation.

#2

C

#3

c?

#4

C…hopefully its as ez as we are thinking

#5

let me get my thesaurus… pretty sure we won’t see this question on the exam

#6

it is C but for I forgot “Warranted” and just remembered “intrinsic” price multiple

#7

Justified is based on fundamental analysis, right!

#8

Now, would you call that “relative” or “absolute” valuation?

#9

i’ll say c, but i really wish the answer was d.

#10

McLeod81 Wrote: ------------------------------------------------------- > Now, would you call that “relative” or “absolute” > valuation? Absoute. Wouldn’t relative be comparing it against benchmark or what’s implied by market?

#11

Intristic valuation = absolute market based multiples / benchmark = relative

#12

McLeod81 Wrote: ------------------------------------------------------- > Intristic valuation = absolute > > market based multiples / benchmark = relative Well, glad to know I at least have word definitions down pat. Thanks for the back-up, McLeod. Hahaha!