Questions: Why is relative valuation considered more intuitive compared to absolute valuation?

The answer is: Because it involves comparing a company to similar companies or the overall market, making the process more relatable.

Explanation for each option:

1. Because it uses complex mathematical models that are easier to manipulate.
   This option is incorrect. Relative valuation is not considered intuitive because of complex mathematical models. In fact, complex models can often make a valuation less intuitive. Relative valuation is generally simpler and more straightforward than absolute valuation, which often involves complex models like discounted cash flow (DCF).

2. Because it is based on historical data and is therefore easier to understand.
   This option is partially correct but not the main reason why relative valuation is considered more intuitive. While historical data can be a component of relative valuation, the key aspect that makes it intuitive is the comparison to similar entities, which provides a context that is easier to grasp.

3. Because it involves comparing a company to similar companies or the overall market, making the process more relatable.
   This option is correct. Relative valuation is considered more intuitive because it involves comparing a company to its peers or the market, which provides a benchmark that is easier for investors to understand. This relatability makes it easier to grasp the valuation in the context of the industry or market norms.