You know that firm XYZ is very poorly run. On a scale of 1 (worst) to 10 (best), you would give it a score of 3. The market cons

Question

Shalnov [3]

3 years ago

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You know that firm XYZ is very poorly run. On a scale of 1 (worst) to 10 (best), you would give it a score of 3. The market cons

ensus evaluation is that the management score is only 2. Should you buy or sell the stock?

Business

1 answer:

e-lub [12.9K] · Answer 1 · 2022-05-24T03:03:48+03:00

Full question:

You know that firm XYZ is very poorly run. On a scale of 1 (worst) to 10 (best), you would give it a score of 3. The market consensus evaluation is that the management score is only 2. Should you buy or sell the stock?

A. Buy

B. Sell

Answer:

Buy the stock

Explanation:

At any position in time, the stock price displays all candidly accessible erudition about the company. This implies that an investor can obtain abnormal returns only if that investor holds private erudition about the firm's forecasts.

The firm's administration is not as critical as everyone else considers it to be, hence, the firm is underestimated by the market. You are scarcely hopeless about the firm's probabilities than the assumptions constructed into the stock price. As the administration of the firm is not as weak as anticipated to be. So the investor will determine to buy the stocks of the firm.