Question

Fundamental analysis shows that stock in Cedar Valley Furniture Corporation has a price that exceeds its present value. Group of answer choices This stock is undervalued; you should consider adding it to your portfolio. This stock is overvalued; you should consider adding it to your portfolio. This stock is overvalued; you shouldn't consider adding it to your portfolio. This stock is undervalued; you shouldn't consider adding it to your portfolio. None of the options is correct.

Answer 1

The correct option is :

This stock is overvalued; you shouldn't consider adding it to your portfolio.

Step-by-step explanation:

The stocks that are in cedar valley corporation has a price that exceedes its present value from this statement the first given option doesn't justify as the stocks rates are not undervalued.

Now, in the second option its again given that the stock will be overvalued which is true but it should be added to the portfolio is not correct. so, this option is not considered.

In the third option it mentions that stock is overvalued which is the correct option and also that it shouldn't be added in portfolio.

And the last one states that its undervalued which restricts the option at this point only.

So, third option is correct.