Question 1

In the maturity stage of the industry life cycle

Accepted Answer

A) the product has reached full potential. 
B) profit margins are narrower. 
C) producers are forced to compete on price to a greater extent. 
D) the product has reached full potential and profit margins are narrower. 
E) the product has reached full potential, profit margins are narrower, and producers are forced to compete on price to a greater extent. 
A) the product has reached full potential. 
B) profit margins are narrower. 
C) producers are forced to compete on price to a greater extent. 
D) the product has reached full potential and profit margins are narrower. 
E) the product has reached full potential, profit margins are narrower, and producers are forced to compete on price to a greater extent. E

Question 2

The life cycle stage in which industry leaders are likely to emerge is the

Accepted Answer

A) start-up stage. 
B) maturity stage. 
C) consolidation stage. 
D) relative decline stage. 
E) All of the options 
A) start-up stage. 
B) maturity stage. 
C) consolidation stage. 
D) relative decline stage. 
E) All of the options C

Question 3

In the consolidation stage of the industry life cycle

Accepted Answer

A) it is difficult to predict which firms will succeed and which firms will fail. 
B) industry growth is very rapid. 
C) the performance of firms will more closely track the performance of the overall industry. 
D) it is difficult to predict which firms will succeed and which firms will fail and industry growth is very rapid. 
E) industry growth is very rapid and the performance of firms will more closely track the performance of the overall industry. 
A) it is difficult to predict which firms will succeed and which firms will fail. 
B) industry growth is very rapid. 
C) the performance of firms will more closely track the performance of the overall industry. 
D) it is difficult to predict which firms will succeed and which firms will fail and industry growth is very rapid. 
E) industry growth is very rapid and the performance of firms will more closely track the performance of the overall industry. C

Question 4

In the start-up stage of the industry life cycle

Accepted Answer

A) it is difficult to predict which firms will succeed and which firms will fail. 
B) industry growth is very rapid. 
C) firms pay a high level of dividends. 
D) it is difficult to predict which firms will succeed and which firms will fail and industry growth is very rapid. 
E) industry growth is very rapid and firms pay a high level of dividends. 
A) it is difficult to predict which firms will succeed and which firms will fail. 
B) industry growth is very rapid. 
C) firms pay a high level of dividends. 
D) it is difficult to predict which firms will succeed and which firms will fail and industry growth is very rapid. 
E) industry growth is very rapid and firms pay a high level of dividends.

Question 5

A variety of factors relating to industry structure affect the performance of the firm, including

Accepted Answer

A) threat of entry. 
B) rivalry between existing competitors. 
C) the state of the economy. 
D) threat of entry and the state of the economy. 
E) threat of entry and rivalry between existing competitors. 
A) threat of entry. 
B) rivalry between existing competitors. 
C) the state of the economy. 
D) threat of entry and the state of the economy. 
E) threat of entry and rivalry between existing competitors.

Question 6

Assume that the Federal Reserve decreases the money supply.This action will cause ________ to decrease.

Accepted Answer

A) interest rates 
B) the unemployment rate 
C) investment in the economy 
D) trade balance 
A) interest rates 
B) the unemployment rate 
C) investment in the economy 
D) trade balance

Question 7

Discuss the ways in which the global economy might have an effect on a firm whose headquarters are in Montana.Be specific-cite some of the relevant factors that should be considered.

Accepted Answer

A firm that operates from Montana cannot

Question 8

The stock market exhibiting the highest U.S.dollar return in 2013 was

Accepted Answer

A) Thailand. 
B) Singapore. 
C) Greece. 
D) South Korea. 
E) China. 
A) Thailand. 
B) Singapore. 
C) Greece. 
D) South Korea. 
E) China.

Question 9

The emerging stock market exhibiting the highest local currency return in 2012 was

Accepted Answer

A) Thailand. 
B) China. 
C) Singapore. 
D) Mexico. 
E) Brazil. 
A) Thailand. 
B) China. 
C) Singapore. 
D) Mexico. 
E) Brazil.

Question 10

If interest rates decrease, business investment expenditures are likely to ______ and consumer durable expenditures are likely to _________.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease 
E) be unaffected; be unaffected 
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease 
E) be unaffected; be unaffected

Question 11

A rapidly growing GDP indicates a(n) ______ economy with ______ opportunity for a firm to increase sales.

Accepted Answer

A) stagnant; little 
B) stagnant; ample 
C) expanding; little 
D) expanding; ample 
E) stable; no 
A) stagnant; little 
B) stagnant; ample 
C) expanding; little 
D) expanding; ample 
E) stable; no

Question 12

Which of the following are examples of defensive industries

Accepted Answer

A) Food producers 
B) Durable goods producers 
C) Pharmaceutical firms 
D) Public utilities 
E) Food producers, pharmaceutical firms, and public utilities 
A) Food producers 
B) Durable goods producers 
C) Pharmaceutical firms 
D) Public utilities 
E) Food producers, pharmaceutical firms, and public utilities

Question 13

If a firm's sales decrease by 15% and profits decrease by 20% during a recession, the firm's operating leverage is

Accepted Answer

A) 1.33. 
B) 0.75. 
C) 5. 
D) -5. 
A) 1.33. 
B) 0.75. 
C) 5. 
D) -5.

Question 14

The industry with the lowest ROE in 2012 was

Accepted Answer

A) money center banks. 
B) chemical products. 
C) business software. 
D) biotech. 
E) integrated oil and gas. 
A) money center banks. 
B) chemical products. 
C) business software. 
D) biotech. 
E) integrated oil and gas.

Question 15

Two firms, C and D, both produce coat hangers.The price of coat hangers is $1.20 each.Firm C has total fixed costs of $750,000 and variable costs of 30¢ per coat hanger.Firm D has total fixed costs of $400,000 and variable costs of 50¢ per coat hanger.The corporate tax rate is 40%.If the economy is strong, each firm will sell 2,000,000 coat hangers.If the economy enters a recession, each firm will sell 1,400,000 coat hangers. If the economy is strong, the tax of firm C will be

Accepted Answer

A) $420,000. 
B) $750,000. 
C) $510,000. 
D) $204,000. 
A) $420,000. 
B) $750,000. 
C) $510,000. 
D) $204,000.

Question 16

Fiscal policy generally has a _______ direct impact than monetary policy on the economy, and the formulation and implementation of fiscal policy is ______ than that of monetary policy.

Accepted Answer

A) more; quicker 
B) more; slower 
C) less; quicker 
D) less; slower 
E) Cannot tell from the information given 
A) more; quicker 
B) more; slower 
C) less; quicker 
D) less; slower 
E) Cannot tell from the information given

Question 17

Investment manager Peter Lynch refers to firms that are in bankruptcy or soon might be as

Accepted Answer

A) slow growers. 
B) stalwarts. 
C) cyclicals. 
D) asset plays. 
E) turnarounds. 
A) slow growers. 
B) stalwarts. 
C) cyclicals. 
D) asset plays. 
E) turnarounds.

Question 18

Assume the U.S.government was to decide to increase the budget deficit.This action will most likely cause __________ to increase.

Accepted Answer

A) interest rates 
B) government borrowing 
C) unemployment 
D) interest rates and government borrowing 
E) None of the options 
A) interest rates 
B) government borrowing 
C) unemployment 
D) interest rates and government borrowing 
E) None of the options

Question 19

Two firms, C and D, both produce coat hangers.The price of coat hangers is $1.20 each.Firm C has total fixed costs of $750,000 and variable costs of 30¢ per coat hanger.Firm D has total fixed costs of $400,000 and variable costs of 50¢ per coat hanger.The corporate tax rate is 40%.If the economy is strong, each firm will sell 2,000,000 coat hangers.If the economy enters a recession, each firm will sell 1,400,000 coat hangers. If the economy enters a recession, the total revenue of firm C will be

Accepted Answer

A) $1,680,000. 
B) $1,400,000. 
C) $2,000,000. 
D) $0. 
E) None of the options 
A) $1,680,000. 
B) $1,400,000. 
C) $2,000,000. 
D) $0. 
E) None of the options

Question 20

Inflation

Accepted Answer

A) is the rate at which the general level of prices is increasing. 
B) rates are high when the economy is considered to be "overheated." 
C) is unrelated to unemployment rates. 
D) is the rate at which the general level of prices is increasing and rates are high when the economy is considered to be "overheated." 
E) is the rate at which the general level of prices is increasing and is unrelated to unemployment rates. 
A) is the rate at which the general level of prices is increasing. 
B) rates are high when the economy is considered to be "overheated." 
C) is unrelated to unemployment rates. 
D) is the rate at which the general level of prices is increasing and rates are high when the economy is considered to be "overheated." 
E) is the rate at which the general level of prices is increasing and is unrelated to unemployment rates.

Exam 17: Macroeconomic and Industry Analysis

In the maturity stage of the industry life cycle

The life cycle stage in which industry leaders are likely to emerge is the

In the consolidation stage of the industry life cycle

In the start-up stage of the industry life cycle

A variety of factors relating to industry structure affect the performance of the firm, including

Assume that the Federal Reserve decreases the money supply.This action will cause ________ to decrease.

Discuss the ways in which the global economy might have an effect on a firm whose headquarters are in Montana.Be specific-cite some of the relevant factors that should be considered.

The stock market exhibiting the highest U.S.dollar return in 2013 was

The emerging stock market exhibiting the highest local currency return in 2012 was

If interest rates decrease, business investment expenditures are likely to ______ and consumer durable expenditures are likely to _________.

A rapidly growing GDP indicates a(n) ______ economy with ______ opportunity for a firm to increase sales.

Which of the following are examples of defensive industries

If a firm's sales decrease by 15% and profits decrease by 20% during a recession, the firm's operating leverage is

The industry with the lowest ROE in 2012 was

Fiscal policy generally has a _______ direct impact than monetary policy on the economy, and the formulation and implementation of fiscal policy is ______ than that of monetary policy.

Investment manager Peter Lynch refers to firms that are in bankruptcy or soon might be as

Assume the U.S.government was to decide to increase the budget deficit.This action will most likely cause __________ to increase.

Inflation

The Investment Environment

Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

If interest rates decrease, business investment expenditures are likely to and consumer durable expenditures are likely to ___.

A rapidly growing GDP indicates a(n) economy with opportunity for a firm to increase sales.

Fiscal policy generally has a _ direct impact than monetary policy on the economy, and the formulation and implementation of fiscal policy is than that of monetary policy.