Market Analysis and Valuation Flashcards

What is a bear market?

Answer: A market experiencing a prolonged decline of 20% or more in asset prices from recent highs

A bear market is typically defined as a decline of 20% or more in a major stock index from its most recent high, often accompanied by pessimism and expectations of further decline.

What is the dividend yield of a stock?

Answer: The annual dividend per share divided by the stock's current price, expressed as a percentage

Dividend yield measures the annual dividend payment as a percentage of the stock's current price, allowing investors to compare income generated by different dividend-paying stocks.

What does 'market capitalization' mean?

Answer: The total market value of a company's outstanding shares, calculated as share price multiplied by shares outstanding

Market capitalization is the total dollar value of a company's outstanding shares, found by multiplying the current share price by the total number of shares outstanding.

What is a moving average in technical analysis?

Answer: The average price of a security over a specific time period, updated continuously as new prices are added

A moving average smooths out price data over a set period (such as 50 or 200 days) to help identify the direction of a trend by filtering out short-term price fluctuations.

What is intrinsic value in stock analysis?

Answer: The perceived true or fundamental value of a stock based on analysis of financial data, independent of market price

Intrinsic value is an estimate of a stock's true worth based on fundamentals like earnings, assets, and growth prospects, which may differ significantly from its current market price.

What is a resistance level in technical analysis?

Answer: A price level at which a stock has historically had difficulty rising above due to increased selling pressure

A resistance level is a price ceiling where a stock historically struggles to break through, as sellers tend to emerge or increase when the price reaches that level.