Stock market price is often based investors perceived risk

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Reference no: EM13722306

In November 2006, Citi groups stock (NYSE:C) was trading at $49.59. Following the credit crisis on 2007-2008 and by at the end of October 2009, Citigroup stock price has plummeted to $4,27 Several banks went under, and the other saw their stock prices lose more than 60% of their value.

Based on your understanding of stock prices and intrinsic, values, which of the follow statements is true?

1. A stock's market price is often based on investors perceived risk in the company.

2. The intrinsic value of a stock is based only on perceived investor returns.

Reference no: EM13722306

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