Question 1

Despite political,cultural,and economic differences,foreign markets are driven largely by the same factors that drive U.S.markets.

Accepted Answer

A) True 
 B)False

Question 2

When interest rates fall,bond prices:

Accepted Answer

A) rise. 
B) fall. 
C) remain unchanged. 
D) rise or fall depending on the expected inflation premium. 
A) rise. 
B) fall. 
C) remain unchanged. 
D) rise or fall depending on the expected inflation premium.

Question 3

In the U.S. ,since the end of World War II,the typical business cycle contraction has had a duration of:

Accepted Answer

A) 10 months. 
B) 21 months. 
C) 32 months. 
D) 46 months. 
A) 10 months. 
B) 21 months. 
C) 32 months. 
D) 46 months.

Question 4

Which of the following statements regarding market P/E ratios is true?

Accepted Answer

A) P/E ratios are higher when interest rates are lower. 
B) P/E ratios are higher when dividend yields are higher. 
C) P/E ratios are higher when inflation is higher. 
D) P/E ratios are higher when unemployment is lower. 
A) P/E ratios are higher when interest rates are lower. 
B) P/E ratios are higher when dividend yields are higher. 
C) P/E ratios are higher when inflation is higher. 
D) P/E ratios are higher when unemployment is lower.

Question 5

What are the implications of the article "Overcoming the Bear Market Blues" for investors?

Accepted Answer

Two points emerge:The first is that the

Question 6

If the trailing P/E for the S&P 500 is 18 and the forward P/E for the S&P 500 is 15,which of the following is true?

Accepted Answer

A) The stock market is expected to decrease 
B) The stock market is expected to increase 
C) Corporate earnings are expected to decrease 
D) Corporate earnings are expected to increase 
A) The stock market is expected to decrease 
B) The stock market is expected to increase 
C) Corporate earnings are expected to decrease 
D) Corporate earnings are expected to increase

Question 7

According to available evidence,investors lose more by missing a bull market than by staying in a bear market.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A) The value of final goods,only 
B) The value of final goods and services,only 
C) The value of final goods,services,and labor,only 
D) The value of final goods,services,labor,and capital 
A) The value of final goods,only 
B) The value of final goods and services,only 
C) The value of final goods,services,and labor,only 
D) The value of final goods,services,labor,and capital

Question 9

Why is the stock market a leading indicator of the economy?Use the constant-growth dividend discount model in your explanation.

Accepted Answer

Stock prices are based on investors' exp

Question 10

The stock market is a leading indicator of the economy because investors discount future cash flows.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) Lagging indicators 
B) Emerging indicators 
C) Leading indicators 
D) Coincident indicators 
A) Lagging indicators 
B) Emerging indicators 
C) Leading indicators 
D) Coincident indicators

Question 12

Why is there an inverse relationship between P/Es and dividend yield?

Accepted Answer

Price is in the numerator of P

Question 13

Current stock prices reflect:

Accepted Answer

A) investors' confidence in the current economy. 
B) investors' confidence in the current administration. 
C) investors' expectations of the future. 
D) investors' attitudes about the past market. 
A) investors' confidence in the current economy. 
B) investors' confidence in the current administration. 
C) investors' expectations of the future. 
D) investors' attitudes about the past market.

Question 14

Use the constant-growth dividend discount model to explain why stock prices have an inverse relationship to interest rates.

Accepted Answer

The stock price (P₀)based on t

Question 15

The earnings yield,which is used in the Fed model,is the:

Accepted Answer

A) same as the dividend yield. 
B) inverse of the dividend yield. 
C) same as the P/E ratio. 
D) inverse of the P/E ratio. 
A) same as the dividend yield. 
B) inverse of the dividend yield. 
C) same as the P/E ratio. 
D) inverse of the P/E ratio.

Question 16

Is it useful to do a trend analysis of P/E ratios of the S&P 500 Composite Index over time and extrapolate it to project future expected P/Es?

Accepted Answer

No.P/Es va

Question 17

Most analysts agree that using the money supply as an indicator of future economic activity is accurate.

Accepted Answer

A) True 
 B)False

Question 18

Investors should keep a watch on the Federal Reserve because of the effect of Fed policy actions on interest rates and security returns.

Accepted Answer

A) True 
 B)False

Question 19

The institution most involved with the U.S.money supply and interest rates is:

Accepted Answer

A) the Treasury Department. 
B) the Federal Reserve. 
C) the Department of Commerce. 
D) the U.S.Mint. 
A) the Treasury Department. 
B) the Federal Reserve. 
C) the Department of Commerce. 
D) the U.S.Mint.

Question 20

Traditionally,how many months before an economic recovery have stock prices started increasing?

Accepted Answer

A) 3-5,with 4 typical 
B) 5-7,with 6 typical 
C) 8-10,with 9 typical 
D) 10-12,with 11 typical 
A) 3-5,with 4 typical 
B) 5-7,with 6 typical 
C) 8-10,with 9 typical 
D) 10-12,with 11 typical

Exam 13: Economy Market Analysis

Despite political,cultural,and economic differences,foreign markets are driven largely by the same factors that drive U.S.markets.

When interest rates fall,bond prices:

In the U.S. ,since the end of World War II,the typical business cycle contraction has had a duration of:

Which of the following statements regarding market P/E ratios is true?

What are the implications of the article "Overcoming the Bear Market Blues" for investors?

If the trailing P/E for the S&P 500 is 18 and the forward P/E for the S&P 500 is 15,which of the following is true?

According to available evidence,investors lose more by missing a bull market than by staying in a bear market.

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

Why is the stock market a leading indicator of the economy?Use the constant-growth dividend discount model in your explanation.

The stock market is a leading indicator of the economy because investors discount future cash flows.

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

Why is there an inverse relationship between P/Es and dividend yield?

Current stock prices reflect:

Use the constant-growth dividend discount model to explain why stock prices have an inverse relationship to interest rates.

The earnings yield,which is used in the Fed model,is the:

Is it useful to do a trend analysis of P/E ratios of the S&P 500 Composite Index over time and extrapolate it to project future expected P/Es?

Most analysts agree that using the money supply as an indicator of future economic activity is accurate.

Investors should keep a watch on the Federal Reserve because of the effect of Fed policy actions on interest rates and security returns.

The institution most involved with the U.S.money supply and interest rates is:

Traditionally,how many months before an economic recovery have stock prices started increasing?

Understanding Investments

Investment Alternatives

Indirect Investing

Securities Markets and Market Indexes

How Securities Are Traded

The Risks and Returns From Investing

Portfolio Theory

Portfolio Selection

Asset Pricing Models

Common Stock Valuation

Common Stocks: Analysis and Strategy

Market Efficiency

Industry Analysis

Company Analysis

Technical Analysis

Bond Yields

Bonds: Analysis and Strategy

Options

Futures

Portfolio Management

Evaluation of Investment Performance

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