Exam 13: Economymarket Analysis

To value the market, an investor must analyze both corporate earnings and multipliers.

Which of the following is not a type of index of general economic activity?

The advance estimate by the Bureau of Economic Analysis predicts direction of quarterly change in real GDP growth approximately what percent of the time?

The EPS on a composite stock index this past year was $3.25. The earnings are expected to grow at a constant rate of 7 percent forever. The dividend payout ratio is expected to continue at its current rate of 35 percent, and the dividend yield is expected to be 4 percent. Calculate the intrinsic value of the index.

Which of the following is considered a leading indicator of a country's economy?

According to the Fed model, investors should overweight stocks when 10-year T-bonds are yielding more than the S&P 500 earnings yield.

What portion of the world's market capitalization is comprised of U.S. firms?

If the economy is prospering, investors expect corporate earnings to rise.

In the early stages of a business cycle, the yield curve is usually:

Why do stock investors pay attention to the bond market?

The National Bureau of Economic Research (NBER) is:

What are the implications of the evidence regarding bear markets?

Most analysts believe that the best measure of overall U.S. economic activity is:

The Fed model is based on the premise that expansive Fed policy promotes favorable stock market returns.

Many investors view an inverted yield curve as a precursor to:

Which of the following is included in Gross Domestic Product (GDP)?

If interest rates rise, the risk-free rate declines.

When speculation pushes asset prices to unsustainable highs, this is known as a:

Assuming a constant P/E ratio, the growth in stock prices should equal the growth in earnings.

With a steep, upward-sloping yield curve, investors expect: