Securities Trader Representative (Series 57) Practice Exam

Fundamental analysis primarily emphasizes examining economic and financial factors that influence the intrinsic value of a security. This approach involves analyzing a company's financial statements, industry position, economic conditions, and other elements that contribute to its overall health and performance. By assessing these fundamental factors, traders and investors aim to determine whether a security is undervalued or overvalued in the market.

This method contrasts with other analyses, such as technical analysis, which focuses on historical price and volume trends of securities without delving into the underlying economic conditions or financial stability of the company. While determining expected return on investment and analyzing market sentiment might play a role in a trader's overall strategy, they do not represent the core focus of fundamental analysis. Fundamental analysis is all about understanding the true worth of a company based on its financial health and market conditions.