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Basic Question 3 of 3
Which value definition is the perceived actual value of an asset?
B. Intrinsic value.
C. Going concern value.
A. Fair market value.
B. Intrinsic value.
C. Going concern value.
User Contributed Comments 4
| User | Comment |
|---|---|
| rhardin | I thought it was A - Fair market value. Because it doesn't really matter what our calculations are to find intrinsic value... if no one will buy at that price, then it is not the actual value. Any thoughts? |
| clee086 | I also thought it was A - Fair Market Value because that is what its traded for on the market... So that would be its actual value; while intrinsic value is a estimation based on perceived variables. |
| DariSH | This is a good one. The key word is PERCEIVED. |
| tushi123 | the 'perceived' value is what the investor perceives as the intrinsic value of the asset, and then invests if the market value<perceived value, expecting to make a profit. |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
define valuation and intrinsic value and explain sources of perceived mispricing;
explain the going concern assumption and contrast a going concern value to a liquidation value;
describe definitions of value and justify which definition of value is most relevant to public company valuation;
CFA® 2025 Level II Curriculum, Volume 3, Module 20.