BFCA Exam Questions and Answers

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NEW QUESTION: 1
An asset seems to be undervalued relative to a comparison asset or group of assets,
I). The asset is expected to outperform the comparison asset or assets on a relative basis.
II). The asset may be undervalued.
III). The asset may be overvalued.
A. I and III.
B. I, II and III.
C. I and II.
Answer: B
Explanation:
The word relative is necessary. The asset may be overvalued on an absolute basis if the comparison asset or assets themselves are not efficiently priced.


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