equity quiz

goodman2011 · May 23, 2011, 4:59pm

which stock has most variable earning ? A value B growth C momentum

bpdulog · May 23, 2011, 5:00pm

A

Paraguay · May 23, 2011, 5:01pm

A

june2009 · May 23, 2011, 5:09pm

A - CFA rationale is that they are tied to economic cycles vs growth which will/should grow no matter the stage of the cycle

deriv108 · May 23, 2011, 5:16pm

A.

muffin09 · May 23, 2011, 5:18pm

A - got burned on this on a test

me.tega · May 23, 2011, 5:23pm

Let’s play the devil’s advocate: Could it be B because growth stocks show high positive variation in earnings? Value stocks such as utilities tend to have steady earnings…

goodman2011 · May 23, 2011, 5:27pm

answer is A contrarian like to buy cyclical stock and hope reverting to mean,such stocks include GM, ford, chresler

pimpineasy · May 23, 2011, 5:46pm

A

deriv108 · May 23, 2011, 5:46pm

“Earnings variability. A value-oriented portfolio will hold companies with greater earnings variability because of the willingness to hold companies with cyclical earnings.”(p235). P/E is is low ==> E/P is high. The EPS growth rate is lower than that of growth companies, but its % changes could be larger.