market value of any real or financial asset, including stocks, bonds, or art work purchased in hope of selling it at a profit, may be estimated by determining future cash flows and then discounting them back to the present.

Question

Quizplus · Accepted Answer

This statement is true. The market value of any asset can be estimated by determining its future cash flows and then discounting them back to the present. This is known as the discounted cash flow (DCF) analysis and is commonly used to value stocks, bonds, real estate, and other types of assets.

Market Value of Any Real or Financial Asset, Including Stocks