According to the concept of 'Margin of Safety', when should an investor buy stocks? Option: When the stock price is at a discount to its intrinsic value, When the stock price is higher than its intrinsic value, When the stock price is at its peak, When the stock price is stable

<< Back

Hi

Show Ans

i

According to the concept of 'Margin of Safety', when should an investor buy stocks?

When the stock price is at a discount to its intrinsic value

When the stock price is higher than its intrinsic value

When the stock price is at its peak

When the stock price is stable

<< Back

Hi

Show Ans

i

How is the Margin of Safety calculated in percentage form?

(Intrinsic Value / Current Share Price)

1 − (Current Share Price / Intrinsic Value)

1 + (Current Share Price / Intrinsic Value)

(Current Share Price / Intrinsic Value)

<< Back

Hi

Show Ans

i

Why is intrinsic value considered important for investors?

"It predicts short-term fluctuations in stock prices."

"It helps determine if a stock is overpriced or underpriced."

"It reveals the exact date a company will become profitable."

"It guarantees a specific return on investment."

<< Back

Hi

Show Ans

i

What is the primary purpose of the margin system in stock markets?

"To ensure profits for investors"

"To mitigate risks associated with price uncertainty"

"To increase trading volume in the market"

"To stabilize fluctuating stock prices"

<< Back

Hi

Show Ans

i

According to the text, when should you buy OTM (Out of The Money) options?

"When trading in the second half of the series"

"When volatility is expected to decrease"

"When the target is expected to be achieved close to expiry"

"When the target is expected to be achieved quickly"

<< Back

Hi

Show Ans

i

Which of the following is a potential advantage of intraday trading?

"Earning dividends and other shareholder benefits."

"Holding stocks for long-term growth."

"Capitalizing on short-term price fluctuations."

"Lower risk compared to delivery trading."