Suppose fundamental analysis indicates that XYZ Corporation's stock is undervalued. Group of answer choices This means its present value is less than its price. You should consider adding the stock to your portfolio. This means its present value is less than its price. You shouldn't consider adding the stock to your portfolio. This means its present value is more than its price. You should consider adding the stock to your portfolio. This means its present value is more than its price. You shouldn't consider adding the stock to your portfolio.

Question

Business

Landon Drake

19 April, 12:30

Suppose fundamental analysis indicates that XYZ Corporation's stock is undervalued. Group of answer choices This means its present value is less than its price. You should consider adding the stock to your portfolio. This means its present value is less than its price. You shouldn't consider adding the stock to your portfolio. This means its present value is more than its price. You should consider adding the stock to your portfolio. This means its present value is more than its price. You shouldn't consider adding the stock to your portfolio.

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Alayna Willis · Answer 1

You shouldn't add the stock to your portfolio.

This statement is true.

Explanation:

An undervalued stock is characterised as an asset that sells significantly below the supposed intrinsic value at a profit.

For Example, if the stock sells for $50, but on the premise that future cash flows are expected, it is an undervalued stock.

If you pay excessively, you will lose part or all of your earnings. The same happens when you purchase a stock below its current market value. Purchasing an inflated stock ensures you that the chances of losing money even though it is not profitable for the company.