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      Question

      If the intrinsic value of a share is less than the

      market price, which of the following is most reasonable to assume?
      A That shares have lesser degree of risk Correct Answer Incorrect Answer
      B That the company is high dividend paying Correct Answer Incorrect Answer
      C That market is undervaluing the share Correct Answer Incorrect Answer
      D That market is over valuing the shares Correct Answer Incorrect Answer
      E That the market is rightly valuing the shares Correct Answer Incorrect Answer

      Solution

      A higher market price than the intrinsic value means that the market is assigning more value than is the actual worth and hence it is overvaluing it.Β 

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