what kind of question is this?

An analyst describes how to conduct a global industry analysis, as follows: I. “First, review the return expectations focusing on the current level of profitability and sustainability of competitive advantage of the company.” II. “Next, determine the sources of risk and how they may be affected by both good and bad economic conditions.” In regard to the analyst’s descriptions on how to conduct a global industry analysis, the analyst is: a) I - correct; II - correct b) I - correct; II - incorrect c) I - incorrect; II - incorrect d) I - incorrect; II - correct


This is a weird question! Both sound correct.

i’d say D

top down = economic analysis, industry analysis, company analysis there are only 2 steps here!

…sorry I don’t know the context of the question.

An analysis of return expectations should focus on sources of growth and the sustainability of competitive advantage. The current level of profitability is not nearly as relevant, as equity analysis is forward-looking and simply determining the level provides the analyst with little information on future earnings’ expectations.

D based on expected income