Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

What are four basic aspects of qualitative assessment of industries?

Accepted Answer

Historical performan

Question 3

Which industry has been devastated by changes in EPA regulations since 2010?

Accepted Answer

A) Telecom 
B) Coal 
C) Chemicals 
D) Oil 
A) Telecom 
B) Coal 
C) Chemicals 
D) Oil

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

The food industry is a good example of a countercyclical industry.

Accepted Answer

A) True 
 B)False

Question 6

Give several examples of government effects on industries.

Accepted Answer

For example,deregulation in the financia

Question 7

One limitation of the life cycle approach is that all companies fall into a specific category.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a limitation of the life cycle approach to security ?analysis?

Accepted Answer

A) It focuses on sales rather than stock prices. 
B) It focuses on the past more than the present. 
C) It does not consider the risk in the different cycles. 
D) It does not consider quantitative factors. 
A) It focuses on sales rather than stock prices. 
B) It focuses on the past more than the present. 
C) It does not consider the risk in the different cycles. 
D) It does not consider quantitative factors.

Question 9

Which life cycle stage generally sees industries improving their products,lowering prices,and starting to attract considerable investment funds?

Accepted Answer

A) Pioneering stage 
B) Expansion stage 
C) Stabilization stage 
D) Declining stage 
A) Pioneering stage 
B) Expansion stage 
C) Stabilization stage 
D) Declining stage

Question 10

The basic competitive forces facing industries include all of the following except:

Accepted Answer

A) bargaining power of suppliers. 
B) threat of government regulation. 
C) rivalry between existing competitors. 
D) threat of substitute products. 
A) bargaining power of suppliers. 
B) threat of government regulation. 
C) rivalry between existing competitors. 
D) threat of substitute products.

Question 11

Which of the following industries would you have most liked to have been invested in over the past 25 years?

Accepted Answer

A) Steelworks 
B) Consumer durables 
C) Mining and minerals 
D) Food 
A) Steelworks 
B) Consumer durables 
C) Mining and minerals 
D) Food

Question 12

Standard and Poor's new Global Industry Classification Standard includes approximately:

Accepted Answer

A) 10,000 companies. 
B) 25,000 companies. 
C) 60,000 companies. 
D) 100,000 companies. 
A) 10,000 companies. 
B) 25,000 companies. 
C) 60,000 companies. 
D) 100,000 companies.

Question 13

Differentiate between defensive industries and countercyclical industries.

Accepted Answer

Defensive industries are least

Question 14

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

Accepted Answer

A) Companies may stay in one phase for a significant period of time. 
B) All industries can be classified accurately into a specific phase. 
C) The general framework may not apply to some industries. 
D) The approach does not explicitly lead to a stock price determination. 
A) Companies may stay in one phase for a significant period of time. 
B) All industries can be classified accurately into a specific phase. 
C) The general framework may not apply to some industries. 
D) The approach does not explicitly lead to a stock price determination.

Question 15

The second step in the fundamental analysis of common stock is:

Accepted Answer

A) company analysis. 
B) economy analysis. 
C) industry analysis. 
D) business cycle analysis. 
A) company analysis. 
B) economy analysis. 
C) industry analysis. 
D) business cycle analysis.

Question 16

It is a relatively simple matter of finding industries that will perform well in the short run.

Accepted Answer

A) True 
 B)False

Question 17

How can historical performance help the analyst assess the future prospects for an industry?

Accepted Answer

Historical performance tells the analyst

Question 18

Which of the following types of industries would be expected to perform the worst during an economic contraction?

Accepted Answer

A) Growth 
B) Defensive 
C) Cyclical 
D) Value 
A) Growth 
B) Defensive 
C) Cyclical 
D) Value

Question 19

Which of the following has 10 economic sectors,24 industry groupings,64 industries and 139 sub-industries?

Accepted Answer

A) SIC 
B) NAICS 
C) GICS 
D) Value Line Investment Survey 
A) SIC 
B) NAICS 
C) GICS 
D) Value Line Investment Survey

Question 20

The food industry would be considered a:

Accepted Answer

A) growth industry. 
B) defensive industry. 
C) cyclical industry. 
D) countercyclical industry. 
A) growth industry. 
B) defensive industry. 
C) cyclical industry. 
D) countercyclical industry.

Exam 14: Industry Analysis

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

What are four basic aspects of qualitative assessment of industries?

Which industry has been devastated by changes in EPA regulations since 2010?

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

The food industry is a good example of a countercyclical industry.

Give several examples of government effects on industries.

One limitation of the life cycle approach is that all companies fall into a specific category.

Which of the following is a limitation of the life cycle approach to security ?analysis?

Which life cycle stage generally sees industries improving their products,lowering prices,and starting to attract considerable investment funds?

The basic competitive forces facing industries include all of the following except:

Which of the following industries would you have most liked to have been invested in over the past 25 years?

Standard and Poor's new Global Industry Classification Standard includes approximately:

Differentiate between defensive industries and countercyclical industries.

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

The second step in the fundamental analysis of common stock is:

It is a relatively simple matter of finding industries that will perform well in the short run.

How can historical performance help the analyst assess the future prospects for an industry?

Which of the following types of industries would be expected to perform the worst during an economic contraction?

Which of the following has 10 economic sectors,24 industry groupings,64 industries and 139 sub-industries?

The food industry would be considered a:

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