Use the following two statements to answer this question:
I.Bottom-up analysis: an investment strategy where capital expenditure decisions are considered in connection with whether the firm should continue in this business or for general industry and economic trends.
II.Top-down analysis: an investment strategy that focuses on strategic decisions, such as which industries or products the firm should be involved in, looking at the overall economic picture.

Question

Quizplus · Accepted Answer

I is incorrect because bottom-up analysis actually focuses on individual stocks or investments, analyzing specific company performance rather than broader industry or economic trends. II is correct as it accurately describes top-down analysis, which starts with the overall economy before narrowing down to specific sectors and investments.

Use the Following Two Statements to Answer This Question