CS Executive · Corporate Accounting and Financial Management · Security Analysis
The sequence of the top-down approach in fundamental analysis is:
The top-down approach moves from economic analysis to industry analysis and finally to company analysis. The investor first judges the general economic climate, then selects promising industries, and lastly picks specific companies within them. Starting with the company is the reverse, bottom-up approach.
- ACompany analysis, industry analysis, economic analysis
- BEconomic analysis, industry analysis, company analysisCorrect
- CIndustry analysis, company analysis, economic analysis
- DEconomic analysis, company analysis, industry analysis
Explanation
The top-down (EIC) approach starts with the overall economy, narrows to the industry, and ends with the individual company. Starting from the company is the bottom-up approach, which is why the first option is wrong.
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