n NISM Certifications
XXI NISM Series XXI-A
Medium

Under relative valuation techniques, the value of a stock is estimated based on its current price relative to:

Practice question from NISM XXI A for PMS - Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Cash flow

  2. B

    Earnings

  3. C

    Book value

  4. All of the above

    Correct answer

Why this is the answer

Relative valuation uses multiples such as P/E, P/B, and P/CF to value stocks based on comparisons with similar firms.

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