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What is Margin of Safety?

8. What is Margin of Safety?

1. The point at which total cost and total revenue are equal
2. Difference between the intrinsic value of a stock and its market price
3. The financial calculation weighs the costs of a new business
4. The practice of identifying and reducing business expenses to increase profits

Answer: B) Difference between the intrinsic value of a stock and its market price

Explanation:

The Margin of Safety is a standard of putting resources into which a financial backer possibly buys protections when their market cost is essentially underneath their inborn worth. As such, when the market cost of security is fundamentally underneath your assessment of its characteristic worth, the thing that matters is the edge of wellbeing.