n NISM Certifications
XV NISM Series XV
Medium

If the price of an asset is more than its fair value, the asset is ______.

Practice question from NISM XV Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Overpriced

    Correct answer

  2. B

    Underpriced

  3. C

    Can give higher returns

  4. D

    Fairly priced

Why this is the answer

An asset is overpriced when its market price exceeds its fair value, which is typically calculated using valuation metrics such as discounted cash flows or comparable multiples.

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