Exam 14: Sectorindustry Analysis

The food industry would be considered a:

Industry analysis is important because:

Based on past evidence, if an industry has the number one ranking on price performance, which of the following statements is most accurate? The investor should:

At what stage in the industry life cycle do financial policies become firmly established?

Since performance is not always consistent, an industry's track record should not be of much concern to investors.

Which of the following sectors would be most sensitive to changes in economic conditions?

A company's founders, friends, and family are typically the main investors in the pioneering stage of any company.

Which of the following is not a stage in the industry life cycle?

Which of the following types of industries is likely to be least affected in a recession?

In the expansion stage, products become more standardized.

S&P's Global Industry Classification Standard divides firms into:

The NAICS was developed using a production-oriented approach.

The Value Line Investment Survey covers approximately 60 industries.

Are government effects always a negative effect for firms in an industry?

Mature industries typically have much higher P/E ratios than growth industries, which are riskier.

Portfolio diversification often focuses on cross-industry diversification to pick up correlation coefficients and risk-expected return characteristics that create the portfolio effect. Suggest a realignment of "industry" classifications to reflect fundamental relationships sought through the more casual traditional industries.

The most important point of Porter's analysis is that industry profitability is a function of:

The NAICS puts companies into industries based on the activity in which they are primarily engaged.

The expansion stage of the industry life cycle is probably of most interest to investors because growth is rapid and risk is tolerable.

Which of the following statements about the industry life cycle is incorrect?