Wealth-Forum e-zine

Test your understanding of this topic

Q1.

In which approach, do the investors believe that a company will perform well only if the economy and the industry is in favour of it?

a. Top down approach

b. Bottom up approach

c. Both of these

Q2.

In which approach do investors invest in a company based solely on its credentials and numbers?

a. Top down approach

b. Bottom up approach

c. Both of these

Q3.

In which approach are the balance sheet, cash flows and business analysis used as the primary parameters in casting equity portfolios?

a. Top down approach

b. Bottom up approach

c. Both of these

Q4.

Which of the following approaches should a momentum based investor rely on?

a. Top down approach

b. Bottom up approach

Q5.

Which of the following statements is incorrect?

a. Both top down as well as bottom up investors can profit from their investments

b. Industry averages are important in bottom up approach

c. The primary consideration of stock selection in top down approach is the quality of earnings of the company and its growth expectations.