a. The market value of an asset is the price at which the asset can be bought or sold in the market. It is typically represented by the bid-ask rate quoted in the market.
b. The intrinsic value or the fundamental value is the price of an asset if the complete information and understanding were used. It is generally the present value of all the future expected cash flows of a company.
c. The calculation intrinsic value requires judgment and is an estimate of the price of the security.
d. If the intrinsic value is lower than the market value, it is called an overvalued stock; it is best to sell such stock or go short on it.
If the intrinsic value equals the market value, it is considered a fairly priced stock. Such stocks could be held by the investors.
If, however, the intrinsic value of a stock is greater than the market value, it is an undervalued stock. Investors can buy such stocks or go long on them.