Exam 12: Macro- and Industry Analysis of Share Markets

Fama and Schwert (1977)find that government bonds are __________ related to expected inflation and equities are __________ related to expected inflation.

In general,the stock market is much more volatile than GDP when using weekly and monthly data.

The growth models,ROE change and sales growth,are:

The two extra industry sectors provided for the Australian market above that in the typical GICS classification are:

Companies exhibiting performance that is positively related to the business cycle are called:

Monetary policy is often believed to be most useful in times of:

Possible variables explaining the risk premium include:

The 'industry life cycle' refers to:

Given a dividend payout ratio of 0.75,a required rate of return of 14.37% and a growth rate of 6%,what is the price-earnings ratio?

Studies of the Australian economy by Strong and Tan (1991)and Mayadunne,Evans and Inder (1995)suggest that research into the Australian economy consistently identifies substantial levels of persistence in economic growth,suggesting the traditional model of trend plus cyclical movements for economic growth may be invalid.

A firm has a P/E ratio of 0.80 and a cost of capital of 5% p.a.and has expected growth of dividends in perpetuity of 2% p.a.What is the share price of the firm?

Which of the following does Harvey (1988)believe is a useful leading indicator for predicting future economic growth?

An increase in expected inflation,other things being equal,will lead to an increase in the discount rate for the dividend discount model.

Macro-analysis of stocks involves consideration of assigning weights between all of the following except:

The Global Industry Classification Standard (GICS)classifies industries in the Australian economy into how many sectors?

The market value of all goods and services produced during a given time period is called industrial production.

The nominal interest rate is 10%.The real interest rate is 4%.The inflation rate must be _________.

Assume the current risk premium is 6%,the risk-free rate of return is 3% and the beta of the equity market is 1.1.What is the discount rate based on the Capital Asset Pricing Model?

The top-down investment approach identifies mispriced securities,and then forms a portfolio from them.

An increase in the level of inflation will unambiguously lead to an increase in the retention rate of the firm.