Question 1

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 
A) threat of entry 
B) rivalry between existing competitors 
C) pressure from substitute products 
D) bargaining power of buyers B

Question 2

The emerging stock market exhibiting the highest local currency return in 2015 was

Accepted Answer

A) Russia 
B) China. 
C) Singapore. 
D) Mexico. 
A) Russia 
B) China. 
C) Singapore. 
D) Mexico. A

Question 3

Investors can ______ invest in an industry with the highest expected return by purchasing ______.

Accepted Answer

A) most easily; industry-specific iShares 
B) not; industry-specific iShares 
C) most easily; industry-specific ADRs 
D) not; individual stocks 
A) most easily; industry-specific iShares 
B) not; industry-specific iShares 
C) most easily; industry-specific ADRs 
D) not; individual stocks A

Question 4

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 Canadian economy. 
A) the balance of trade. 
B) the budget deficit. 
C) the purchasing-power ratio. 
D) unimportant to the Canadian economy.

Question 5

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

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease 
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease

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 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 7

If the economy is shrinking, firms with low operating leverage will experience

Accepted Answer

A) larger decreases in profits than firms with high operating leverage. 
B) similar decreases in profits as firms with high operating leverage. 
C) smaller decreases in profits than firms with high operating leverage. 
D) no change in profits. 
A) larger decreases in profits than firms with high operating leverage. 
B) similar decreases in profits as firms with high operating leverage. 
C) smaller decreases in profits than firms with high operating leverage. 
D) no change in profits.

Question 8

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. 
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.

Question 9

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. 
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.

Question 10

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. 
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.

Question 11

Classifying firms into groups, such as _________, provides an alternative to the industry life cycle.

Accepted Answer

A) slow-growers 
B) stalwarts 
C) Counter-cyclicals 
D) slow-growers and stalwarts 
A) slow-growers 
B) stalwarts 
C) Counter-cyclicals 
D) slow-growers and stalwarts

Question 12

According to Michael Porter, there are five determinants of competition.An example of _____ is the threat new competitors pose to existing competitors in an industry.

Accepted Answer

A) threat of entry 
B) rivalry between existing competitors 
C) pressure from substitute products 
D) bargaining power of buyers 
A) threat of entry 
B) rivalry between existing competitors 
C) pressure from substitute products 
D) bargaining power of buyers

Question 13

Assume the Canadian government was to decide to increase the budget field.Holding all else constant, this will cause ______ to decrease.

Accepted Answer

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

Question 14

Sector rotation

Accepted Answer

A) should always be carried out. 
B) is never worthwhile. 
C) is shifting the portfolio more heavily toward an industry or sector that is expected to perform well in the future. 
D) can be implemented without cost. 
A) should always be carried out. 
B) is never worthwhile. 
C) is shifting the portfolio more heavily toward an industry or sector that is expected to perform well in the future. 
D) can be implemented without cost.

Question 15

Increases in the money supply will cause demand for investment and consumption goods to _______ in the short run and cause prices to ________ in the long run.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; hold steady 
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; hold steady

Question 16

Assume the Canadian government was to decide to increase the budget field.Holding all else constant, this will cause ______ to increase.

Accepted Answer

A) interest rates 
B) government borrowing 
C) unemployment 
D) interest rates and government borrowing 
A) interest rates 
B) government borrowing 
C) unemployment 
D) interest rates and government borrowing

Question 17

If the economy is growing, firms with low operating leverage will experience

Accepted Answer

A) higher increases in profits than firms with high operating leverage. 
B) similar increases in profits as firms with high operating leverage. 
C) smaller increases in profits than firms with high operating leverage. 
D) no change in profits. 
A) higher increases in profits than firms with high operating leverage. 
B) similar increases in profits as firms with high operating leverage. 
C) smaller increases in profits than firms with high operating leverage. 
D) no change in profits.

Question 18

According to Michael Porter, there are five determinants of competition.An example of _____ is when the availability limits the prices that can be charged to customers.

Accepted Answer

A) threat of entry 
B) rivalry between existing competitors 
C) pressure from substitute products 
D) bargaining power of buyers 
A) threat of entry 
B) rivalry between existing competitors 
C) pressure from substitute products 
D) bargaining power of buyers

Question 19

According to Michael Porter, there are five determinants of competition.An example of _____ is when a buyer purchases a large fraction of an industry's output and can demand price concessions.

Accepted Answer

A) threat of entry 
B) rivalry between existing competitors 
C) pressure from substitute products 
D) bargaining power of buyers 
A) threat of entry 
B) rivalry between existing competitors 
C) pressure from substitute products 
D) bargaining power of buyers

Question 20

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 total cost of firm C will be

Accepted Answer

A) $1,680,000. 
B) $1,170,000. 
C) $1,350,000. 
D) $420,000. 
A) $1,680,000. 
B) $1,170,000. 
C) $1,350,000. 
D) $420,000.

Exam 17: Macroeconomic and Industry Analysis

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 emerging stock market exhibiting the highest local currency return in 2015 was

Investors can ______ invest in an industry with the highest expected return by purchasing ______.

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

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

If the economy is shrinking, firms with low operating leverage will experience

Industrial production refers to

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

GDP refers to

Classifying firms into groups, such as _________, provides an alternative to the industry life cycle.

According to Michael Porter, there are five determinants of competition.An example of _____ is the threat new competitors pose to existing competitors in an industry.

Assume the Canadian government was to decide to increase the budget field.Holding all else constant, this will cause ______ to decrease.

Sector rotation

Increases in the money supply will cause demand for investment and consumption goods to _______ in the short run and cause prices to ________ in the long run.

Assume the Canadian government was to decide to increase the budget field.Holding all else constant, this will cause ______ to increase.

If the economy is growing, firms with low operating leverage will experience

According to Michael Porter, there are five determinants of competition.An example of _____ is when the availability limits the prices that can be charged to customers.

According to Michael Porter, there are five determinants of competition.An example of _____ is when a buyer purchases a large fraction of an industry's output and can demand price concessions.

The Investment Environment

Financial Markets, 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

Behavioural 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

Investors can invest in an industry with the highest expected return by purchasing .

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

Increases in the money supply will cause demand for investment and consumption goods to _ in the short run and cause prices to __ in the long run.