Chartered Market Technician (CMT) Practice Exam

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What does bottom-up analysis focus on?

Market trends

A specific government, company, or asset

Bottom-up analysis focuses specifically on individual entities, such as a government, company, or asset, rather than broader market movements or trends. This analysis approach emphasizes understanding the fundamentals of a specific asset—like its financial health, management effectiveness, and market position—before considering external factors that may influence its performance.

Practitioners of bottom-up analysis believe that by thoroughly examining and assessing the particulars of a single entity, they can make more informed investment decisions. It often leads to identifying undervalued assets based on undiscovered or ignored strengths, regardless of the prevailing market conditions or trends. This contrasts with other analysis methods that look at aggregates or broader metrics, which may not provide the detailed insight needed for individual investment decisions.

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Broad economic indicators

Sector performance

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