What does the Margin of Safety (MOS) in value investing suggest?

Buying securities at their estimated intrinsic value. Buying securities only when their share price is below their estimated intrinsic value. Investing in securities based solely on their current market price. Ignoring the intrinsic value and focusing on market trends.

How is the Margin of Safety calculated in percentage form?

(Current Share Price / Intrinsic Value) (Intrinsic Value / Current Share Price) 1 + (Current Share Price / Intrinsic Value) 1 − (Current Share Price / Intrinsic Value)

In accounting, what does the Margin of Safety represent?

The difference between actual sales and total costs. The ratio of fixed costs to variable costs. The gap between current or projected sales and sales at the break-even point. The percentage of profit generated from total sales.

Which of the following is NOT a benefit of a high Margin of Safety in a business?

Indicates optimal performance. Suggests the company can withstand market volatility. Increases the likelihood of experiencing a loss. Demonstrates a strong financial position.

What is a common reason for a low Margin of Safety?

High variable costs. Low sales volume. High fixed costs. Increased market competition.