Page 150 - DCOM504_SECURITY_ANALYSIS_AND_PORTFOLIO_MANAGEMENT

Unit 4: Fundamental Analysis

Erratic Events: It refers to the unpredictable sales caused by unforeseen events like strikes, riots, Notes
war scares, floods, and other disturbances.
Growth Industry: This is an industry that is expected to grow consistently and its growth may
exceed the average growth of the economy.
Net Asset Value: Net asset value (NAV) is a term used to describe the value of an entity's assets
less the value of its liabilities.

4.6 Self Assessment

Fill in the blanks:
1. The security price prevailing in market is called ........................

2. The price of a security justified by its fundamentals is called ........................
3. The market ........................ relates to the speed with which the stock market incorporates
the information about the economy, industry and company, in the share prices, rather
instantaneously.
4. The government employs two broad classes of macroeconomic policies, viz. ...................
policies and ........................ policies.

5. ........................ is the total value of the final output of goods and services produced in the
economy.
6. ........................ surveys can incorporate the opinion or future plans of consumers regarding
their spending.
7. There is always a ........................ with result that interpretation can be erroneous, if it is not
done well in advance.
8. A ........................ is an indicator of the extensiveness or spread of an expansion or contraction.
9. ........................ Index is a narrow type of index.
10. Econometrics is a discipline wherein application of ........................ and ................... techniques
is a part of economic theory.
11. Firms in each different industry typically experience similar levels of ........................ and
similar rates of .......................
12. Every industry passes through four distinct phases of the life cycle, viz. ..............., ...............,
............... and ...............
13. The internal analysis can be done periodically to evaluate ............... and ............... of the
company.

14. Surveys generally study the current ............... and demand, future ............... and proposed
..............., and thereby the expansion prospects vis-à-vis ...............
15. ............... analysis provides a direct link to investor's action and his investment goal in
operational terms.
16. The asset value of a security is determined by estimating the ............... value of the firm,
............... the claims of firm's creditors and allocating the remaining ............... asset value of
the firm over the ............... shares of stock.
17. A balance sheet is a summary of ............... carried after the appropriate closing of the
books.

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