Which one of the following best describes fundamental risk?
• You buy a stock that you believe is underpriced, and the underpricing persists for a long time, hurting your short-term results.
• Your models indicate a stock is mispriced, but you are not sure if this is a real profit opportunity or a model input error.
• A stock is trading in two different markets at two different prices.
• A stock is overpriced, but your fund does not allow you to engage in short sales.