Question 1

Fiscal policy is difficult to implement quickly because

Accepted Answer

A) it requires political negotiations. 
B) much of government spending is nondiscretionary and cannot be changed. 
C) increases in tax rates affect consumer spending gradually. 
D) it requires political negotiations and much of government spending is nondiscretionary and cannot be changed. 
E) it requires political negotiations and increases in tax rates affect consumer spending gradually. 
A) it requires political negotiations. 
B) much of government spending is nondiscretionary and cannot be changed. 
C) increases in tax rates affect consumer spending gradually. 
D) it requires political negotiations and much of government spending is nondiscretionary and cannot be changed. 
E) it requires political negotiations and increases in tax rates affect consumer spending gradually.

Question 2

The process of estimating the dividends and earnings that can be expected from the firm based on determinants of value is called

Accepted Answer

A) business cycle forecasting. 
B) macroeconomic forecasting. 
C) technical analysis. 
D) fundamental analysis. 
E) None of the options 
A) business cycle forecasting. 
B) macroeconomic forecasting. 
C) technical analysis. 
D) fundamental analysis. 
E) None of the options

Question 3

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 after-tax profit of firm C will be

Accepted Answer

A) $0. 
B) $6,000. 
C) $36,000. 
D) $60,000. 
E) $630,000. 
A) $0. 
B) $6,000. 
C) $36,000. 
D) $60,000. 
E) $630,000.

Question 4

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 5

A firm in the early stages of the industry life cycle will likely have

Accepted Answer

A) high market penetration. 
B) high risk. 
C) rapid growth. 
D) high market penetration and rapid growth. 
E) high risk and rapid growth. 
A) high market penetration. 
B) high risk. 
C) rapid growth. 
D) high market penetration and rapid growth. 
E) high risk and rapid growth.

Question 6

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 before tax profit of firm C will be

Accepted Answer

A) $1,680,000. 
B) $1,050,000. 
C) $510,000. 
D) $204,000. 
A) $1,680,000. 
B) $1,050,000. 
C) $510,000. 
D) $204,000.

Question 7

The "real," or inflation-adjusted, exchange rate is

Accepted Answer

A) the balance of trade. 
B) the budget deficit. 
C) the purchasing power ratio. 
D) unimportant to the U.S.economy. 
E) None of the options 
A) the balance of trade. 
B) the budget deficit. 
C) the purchasing power ratio. 
D) unimportant to the U.S.economy. 
E) None of the options

Question 8

Two firms, A and B, both produce widgets.The price of widgets is $1 each.Firm A has total fixed costs of $500,000 and variable costs of 50¢ per widget.Firm B has total fixed costs of $240,000 and variable costs of 75¢ per widget.The corporate tax rate is 40%.If the economy is strong, each firm will sell 1,200,000 widgets.If the economy enters a recession, each firm will sell 1,100,000 widgets. Calculate firm B's degree of operating leverage.

Accepted Answer

A) .714 
B) 9.09 
C) 7.86 
D) 7.14 
A) .714 
B) 9.09 
C) 7.86 
D) 7.14

Question 9

The most widely used monetary tool is

Accepted Answer

A) altering the discount rate. 
B) altering the reserve requirements. 
C) open market operations. 
D) altering marginal tax rates. 
E) None of the options 
A) altering the discount rate. 
B) altering the reserve requirements. 
C) open market operations. 
D) altering marginal tax rates. 
E) None of the options

Question 10

Monetary policy is determined by

Accepted Answer

A) government budget decisions. 
B) presidential mandates. 
C) the Board of Governors of the Federal Reserve System. 
D) congressional actions. 
E) None of the options 
A) government budget decisions. 
B) presidential mandates. 
C) the Board of Governors of the Federal Reserve System. 
D) congressional actions. 
E) None of the options

Fiscal policy is difficult to implement quickly because

The process of estimating the dividends and earnings that can be expected from the firm based on determinants of value is called

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

A firm in the early stages of the industry life cycle will likely have

The "real," or inflation-adjusted, exchange rate is

The most widely used monetary tool is

Monetary policy is determined by

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

Exam 17: Macroeconomic and Industry Analysis

Fiscal policy is difficult to implement quickly because

The process of estimating the dividends and earnings that can be expected from the firm based on determinants of value is called

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

A firm in the early stages of the industry life cycle will likely have

The "real," or inflation-adjusted, exchange rate is

The most widely used monetary tool is

Monetary policy is determined by

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