Your father-in-law's stockbroker examines future earnings and dividends,the expected level of interest rates,and the firm's risk to provide a basis for buy-sell recommendations.This stockbroker uses the ________ approach to stock valuation.

Question

Quizplus · Accepted Answer

The stockbroker described in the scenario is using fundamental analysis, which involves examining a company's financial and economic fundamentals to make buy-sell recommendations. This includes analyzing earnings, dividends, interest rates, and risk, which is consistent with the approach the stockbroker is using. A is incorrect because financial statement analysis is a more narrow approach that focuses only on a company's financial statements. B is incorrect because earnings analysis is only one aspect of fundamental analysis. C is not a recognized valuation approach. E is too vague and does not give a specific alternative approach.

Your Father-In-Law's Stockbroker Examines Future Earnings and Dividends,the Expected Level