Question 1

The industry with the highest return in 2016 was

Accepted Answer

A) trucking. 
B) water utilities. 
C) health plans. 
D) asset management. 
A) trucking. 
B) water utilities. 
C) health plans. 
D) asset management.

Question 2

Which of the following are not examples of defensive industries?

Accepted Answer

A) Food producers 
B) Durable goods producers 
C) Pharmaceutical firms 
D) Public utilities 
A) Food producers 
B) Durable goods producers 
C) Pharmaceutical firms 
D) Public utilities

Question 3

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. 
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.

Question 4

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. 
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.

Question 5

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

Accepted Answer

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

Question 6

The "normal" range of price-earnings ratios for the S&P 500 Index is

Accepted Answer

A) between 2 and 10. 
B) between 5 and 15. 
C) less than 8. 
D) between 12 and 25. 
A) between 2 and 10. 
B) between 5 and 15. 
C) less than 8. 
D) between 12 and 25.

Question 7

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 tax of firm C will be

Accepted Answer

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

Question 8

If interest rates increase, 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 
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease

Question 9

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 
A) more; quicker 
B) more; slower 
C) less; quicker 
D) less; slower

Question 10

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 
A) stagnant; little 
B) stagnant; ample 
C) expanding; little 
D) expanding; ample

Question 11

An example of a highly cyclical industry is

Accepted Answer

A) the automobile industry. 
B) the tobacco industry. 
C) the food industry. 
D) the automobile industry and the tobacco industry. 
A) the automobile industry. 
B) the tobacco industry. 
C) the food industry. 
D) the automobile industry and the tobacco industry.

Question 12

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 cost of firm C will be

Accepted Answer

A) $1,680,000. 
B) $1,170,000. 
C) $750,000. 
D) $420,000. 
A) $1,680,000. 
B) $1,170,000. 
C) $750,000. 
D) $420,000.

Question 13

The North American Industry Classification System (NAICS) codes

Accepted Answer

A) are for firms that operate in the NAFTA region. 
B) group firms by industry. 
C) are a perfect classification system for firms. 
D) are for firms that operate in the NAFTA region and group firms by industry. 
A) are for firms that operate in the NAFTA region. 
B) group firms by industry. 
C) are a perfect classification system for firms. 
D) are for firms that operate in the NAFTA region and group firms by industry.

Question 14

A trough is

Accepted Answer

A) a transition from an expansion in the business cycle to the start of a contraction. 
B) a transition from a contraction in the business cycle to the start of an expansion. 
C) a depression that lasts more than three years. 
D) only something used by farmers to feed pigs and not an investment term. 
A) a transition from an expansion in the business cycle to the start of a contraction. 
B) a transition from a contraction in the business cycle to the start of an expansion. 
C) a depression that lasts more than three years. 
D) only something used by farmers to feed pigs and not an investment term.

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 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. 
A) $1,680,000. 
B) $1,400,000. 
C) $2,000,000. 
D) $0.

Question 16

A peak is

Accepted Answer

A) a transition from an expansion in the business cycle to the start of a contraction. 
B) a transition from a contraction in the business cycle to the start of an expansion. 
C) a depression that lasts more than three years. 
D) only a feature of geography and not an investment term. 
A) a transition from an expansion in the business cycle to the start of a contraction. 
B) a transition from a contraction in the business cycle to the start of an expansion. 
C) a depression that lasts more than three years. 
D) only a feature of geography and not an investment term.

Question 17

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. 
A) start-up stage. 
B) maturity stage. 
C) consolidation stage. 
D) relative decline stage.

Question 18

The industry with the lowest return in 2016 was

Accepted Answer

A) asset management. 
B) telecom services. 
C) health care. 
D) business software. 
A) asset management. 
B) telecom services. 
C) health care. 
D) business software.

Question 19

The average duration of unemployment and changes in the consumer price index for services are

Accepted Answer

A) leading economic indicators. 
B) coincidental economic indicators. 
C) lagging economic indicators. 
D) composite economic indicators. 
A) leading economic indicators. 
B) coincidental economic indicators. 
C) lagging economic indicators. 
D) composite economic indicators.

Question 20

During which stage of the industry life cycle would a firm experience stable growth in sales?

Accepted Answer

A) Consolidation 
B) Relative decline 
C) Maturity 
D) Start-up 
A) Consolidation 
B) Relative decline 
C) Maturity 
D) Start-up

Exam 17: Macroeconomic and Industry Analysis

The industry with the highest return in 2016 was

Which of the following are not examples of defensive industries?

In the start-up stage of the industry life cycle,

In the consolidation stage of the industry life cycle,

The "normal" range of price-earnings ratios for the S&P 500 Index is

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

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.

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

An example of a highly cyclical industry is

The North American Industry Classification System (NAICS) codes

A trough is

A peak is

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

The industry with the lowest return in 2016 was

The average duration of unemployment and changes in the consumer price index for services are

During which stage of the industry life cycle would a firm experience stable growth in sales?

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

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

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.

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