1. WHAT IS the best strategy as far as using financial ratios is concerned?
A. Ratios are good as long as ROE is high.
B. Liquidity is never desirable, and should be ignored.
C. Use many of the ratios, and be sure to include ratios considering profits, asset management, and leverage. Ratios should be industry specific, and looking back in time at the same firm is also good.
D. Ratios are never a good idea.
2. What is the Graham technique – regarding working capital and liabilities?
A. Short stocks with higher P/E ratios
B. Buy stocks at prices below their net working capital, per share.
C. Buy stocks at P/E ratios less then 10.
D. Buy stocks in new industries.