Chartered Investment Manager (CIM) Practice Exam · Question
Which equity portfolio strategy aims to identify undervalued companies whose intrinsic value is believed to be higher than their current market price?
Value investing focuses on selecting stocks that are trading below their perceived intrinsic value, often characterized by low price-to-earnings or price-to-boo
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Question: Which equity portfolio strategy aims to identify undervalued companies whose intrinsic value is believed to be higher than their current market price?
Answer options: ✅ Value investing
- Growth investing
- Passive indexing
- Momentum investing
Correct answer: Value investing
Explanation: Value investing focuses on selecting stocks that are trading below their perceived intrinsic value, often characterized by low price-to-earnings or price-to-book ratios. This contrasts with growth investing, which seeks companies with above-average earnings growth potential.
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