Question 1

If the currency of your country is appreciating,the result should be to ______ exports and to _______ imports.

Accepted Answer

A) stimulate, stimulate 
B) stimulate, discourage 
C) discourage, stimulate 
D) discourage, discourage 
E) not affect,not affect 
A) stimulate, stimulate 
B) stimulate, discourage 
C) discourage, stimulate 
D) discourage, discourage 
E) not affect,not affect C

Question 2

GDP refers to _________.

Accepted Answer

A) the amount of personal disposable income in the economy 
B) the difference between government spending and government revenues 
C) the total manufacturing output in the economy 
D) the total production of goods and services in the economy 
E) none of the above 
A) the amount of personal disposable income in the economy 
B) the difference between government spending and government revenues 
C) the total manufacturing output in the economy 
D) the total production of goods and services in the economy 
E) none of the above D

Question 3

If the economy enters a recession,the before tax profit of Firm C will be ________.

Accepted Answer

A) $1,680,000 
B) $1,170,000 
C) $510,000 
D) $204,000 
E) none of the above 
A) $1,680,000 
B) $1,170,000 
C) $510,000 
D) $204,000 
E) none of the above C

Question 4

If the economy is strong,the after-tax profit of Firm A will be _______.

Accepted Answer

A) $0 
B) $6,000 
C) $36,000 
D) $60,000 
E) none of the above 
A) $0 
B) $6,000 
C) $36,000 
D) $60,000 
E) none of the above

Question 5

If the economy enters a recession,the after-tax profit of Firm B will be _______.

Accepted Answer

A) $0 
B) $6,000 
C) $36,000 
D) $60,000 
E) none of the above 
A) $0 
B) $6,000 
C) $36,000 
D) $60,000 
E) none of the above

Question 6

Industrial production refers to _________.

Accepted Answer

A) the amount of personal disposable income in the economy 
B) the difference between government spending and government revenues 
C) the total manufacturing output in the economy 
D) the total production of goods and services in the economy 
E) none of the above 
A) the amount of personal disposable income in the economy 
B) the difference between government spending and government revenues 
C) the total manufacturing output in the economy 
D) the total production of goods and services in the economy 
E) none of the above

Question 7

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 
E) none of the above 
A) $420,000 
B) $750,000 
C) $510,000 
D) $204,000 
E) none of the above

Question 8

A firm in an industry that is very sensitive to the business cycle will likely have a stock beta ___________.

Accepted Answer

A) greater than 1.0 
B) equal to 1.0 
C) less than 1.0 but greater than 0.0 
D) equal to or less than 0.0 
E) There is no relationship between beta and sensitivity to the business cycle. 
A) greater than 1.0 
B) equal to 1.0 
C) less than 1.0 but greater than 0.0 
D) equal to or less than 0.0 
E) There is no relationship between beta and sensitivity to the business cycle.

Question 9

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 
E) none of the above 
A) interest rates 
B) the unemployment rate 
C) investment in the economy 
D) trade balance 
E) none of the above

Question 10

The stock price index and new orders for nondefense capital goods are

Accepted Answer

A) leading economic indicators. 
B) coincidental economic indicators. 
C) lagging economic indicators. 
D) not useful as economic indicators. 
E) none of the above. 
A) leading economic indicators. 
B) coincidental economic indicators. 
C) lagging economic indicators. 
D) not useful as economic indicators. 
E) none of the above.

Question 11

Discuss the tools of the U.S.government's "demand-side" policy.Include in your discussion of these tools the relative advantages and disadvantages of each in terms of the effect of the use of these tools on the economy.

Accepted Answer

The two tools of the government's "deman

Question 12

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

Question 13

The industry with the lowest ROE in 2009 was

Accepted Answer

A) food. 
B) data storage. 
C) business software. 
D) iron/steel. 
E) integrated oil & gas. 
A) food. 
B) data storage. 
C) business software. 
D) iron/steel. 
E) integrated oil & gas.

Question 14

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 15

An example of a positive demand shock is

Accepted Answer

A) a decrease in the money supply. 
B) a decrease in government spending. 
C) a decrease in foreign export demand. 
D) a decrease in the price of imported oil. 
E) a decrease in tax rates. 
A) a decrease in the money supply. 
B) a decrease in government spending. 
C) a decrease in foreign export demand. 
D) a decrease in the price of imported oil. 
E) a decrease in tax rates.

Question 16

According to Michael Porter,there are five determinants of competition.An example of _____ is when new entrants to an industry put pressure on prices and profits.

Accepted Answer

A) Threat of Entry 
B) Rivalry between Existing Competitors 
C) Pressure from Substitute Products 
D) Bargaining power of Buyers 
E) Bargaining power of Suppliers 
A) Threat of Entry 
B) Rivalry between Existing Competitors 
C) Pressure from Substitute Products 
D) Bargaining power of Buyers 
E) Bargaining power of Suppliers

Question 17

If the economy were going into a recession,an attractive industry to invest in would be the ________ industry.

Accepted Answer

A) automobile 
B) medical services 
C) construction 
D) A and C 
E) B and C 
A) automobile 
B) medical services 
C) construction 
D) A and C 
E) B and C

Question 18

If the economy enters a recession,the after-tax profit of Firm C will be ________.

Accepted Answer

A) $1,680,000 
B) $750,000 
C) $510,000 
D) $204,000 
E) $306,000 
A) $1,680,000 
B) $750,000 
C) $510,000 
D) $204,000 
E) $306,000

Question 19

According to Michael Porter,there are five determinants of competition.An example of _____ is when competitors seek to expand their share of the market.

Accepted Answer

A) Threat of Entry 
B) Rivalry between Existing Competitors 
C) Pressure from Substitute Products 
D) Bargaining power of Buyers 
E) Bargaining power of Suppliers 
A) Threat of Entry 
B) Rivalry between Existing Competitors 
C) Pressure from Substitute Products 
D) Bargaining power of Buyers 
E) Bargaining power of Suppliers

Question 20

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 above 
A) altering the discount rate 
B) altering the reserve requirements 
C) open market operations 
D) altering marginal tax rates 
E) none of the above

Exam 17: Options Markets: Introduction

If the currency of your country is appreciating,the result should be to ______ exports and to _______ imports.

GDP refers to _________.

If the economy enters a recession,the before tax profit of Firm C will be ________.

If the economy is strong,the after-tax profit of Firm A will be _______.

If the economy enters a recession,the after-tax profit of Firm B will be _______.

Industrial production refers to _________.

If the economy is strong,the tax of Firm C will be ________.

A firm in an industry that is very sensitive to the business cycle will likely have a stock beta ___________.

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

The stock price index and new orders for nondefense capital goods are

Discuss the tools of the U.S.government's "demand-side" policy.Include in your discussion of these tools the relative advantages and disadvantages of each in terms of the effect of the use of these tools on the economy.

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

The industry with the lowest ROE in 2009 was

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

An example of a positive demand shock is

According to Michael Porter,there are five determinants of competition.An example of _____ is when new entrants to an industry put pressure on prices and profits.

If the economy were going into a recession,an attractive industry to invest in would be the ________ industry.

If the economy enters a recession,the after-tax profit of Firm C will be ________.

According to Michael Porter,there are five determinants of competition.An example of _____ is when competitors seek to expand their share of the market.

The most widely used monetary tool is ___________.

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Mutual Funds and Other Investment Companies

Introduction to Risk,return,and the Historical Record

Risk Aversion and 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

Option Valuation

Futures Markets

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

Filters

If the currency of your country is appreciating,the result should be to exports and to _ imports.