问题如下：
Which investment approach is the mostlikely basis for Sardar’s buy recommendation for AZ Industrial?
选项：
A. Relative value
B. High-quality value
C. Deep-value investing
解释：
B is correct. Dewey has developed a fundamental active investment process for the Purity Fund that emphasizesfinancial strength and demonstrated profitability. High-quality value investorsfocus on companies’ intrinsic values that are supported by attractive valuation
metrics, with an emphasis on financial strength and demonstrated profitability.
In their view, investors sometimes behave irrationally, making stocks trade at
prices very different from intrinsic value based on company fundamentals. A is
incorrect because investors who pursue a relative value strategy evaluate
companies by comparing their value indicators (e.g., P/E or P/B multiples) with
the average valuation of companies in the same industry sector, in an effort to
identify stocks that offer value relative to their sector peers. AZ Industrial
is trading at a high P/B relative to the industry average, which is contrary to
relative value and suggests that the relative value approach was not the basis
for Sardar’s buy recommendation. C is incorrect because a deep-value investing
approach focuses on undervalued companies that are available at extremely low
valuation relative to their assets. Such companies are often those in financial
distress, which is not reflective of financial strength or demonstrated
profitability. Therefore, Sardar’s buy recommendation was not based on a
deep-value investing orientation.
