The intrinsic value of a stock provides a purchase price for the stock
A)that is reasonable given the associated level of risk.
B)which will assuredly yield the anticipated capital gain.
C)which will guarantee the expected rate of return.
D)that is always below the market value but yet yields the expected rate of return.

Question

Quizplus · Accepted Answer

The intrinsic value of a stock provides a purchase price that is reasonable given the associated level of risk. It takes into account the company's financial performance, growth potential, and other relevant factors to estimate its true value. However, it does not guarantee a specific rate of return or capital gain, as these are subject to market fluctuations and other factors. Therefore, investors should consider the intrinsic value as a guideline rather than a guarantee.

The Intrinsic Value of a Stock Provides a Purchase Price