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Quiz 5 Chapter 12
and 13
Chapter 12:
___________________________________________________________________________
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1.
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A top-down analysis
of a firm's prospects starts with an analysis of the ____.
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A.
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firm's position in
its industry
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B.
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U.S. economy or
even the global economy
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D.
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specific firm under
consideration
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2.
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In 1980 the
dollar-yen exchange rate was about $.0045. In 2012 the yen-dollar exchange
rate was about 80 yen per dollar. A Japanese producer would have had to
increase the dollar price of a good sold in the United States by
approximately _____ to maintain the same yen price in 2012.
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3.
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An increase in the
value of the yen against the U.S. dollar can cause the Japanese automaker
Toyota to either _____________ on its U.S. sales.
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A.
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lose market share
or reduce its profit margin
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B.
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gain market share
or reduce its profit margin
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C.
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lose market share
or increase its profit margin
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D.
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gain market share
or increase its profit margin
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4.
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You estimate that the
present value of a firm's cash flow is valued at $15 million. The break up
value of the firm if you were to sell the major assets and divisions
separately would be $20 million. This is an example of what Peter Lynch would
call ___________.
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5.
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Between 1999 and
2010, the purchasing power of the U.S. dollar increased relative to the
purchasing power of _______.
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6.
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If you believe the
economy is about to go into a recession, you might change your asset
allocation by selling _______ and buying ______.
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A.
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growth stocks;
long-term bonds
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B.
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long-term bonds;
growth stocks
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C.
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defensive stocks;
growth stocks
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D.
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defensive stocks;
long-term bonds
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7.
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The yield curve
spread between the 10-year T-bond yield and the federal funds rate is a
_______ economic indicator.
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8.
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The Conference
Board's Consumer Confidence Index is released ______.
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9.
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You can earn abnormal
returns on your investments via macro forecasting ______.
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A.
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if you can forecast
the economy at all
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B.
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if you can forecast
the economy as well as the average forecaster
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C.
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if you can forecast
the economy better than the average forecaster
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D.
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only if you can
forecast the economy with perfect accuracy
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10.
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Which of the
following industries would most analysts classify as mature?
|
A.
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Internet service
providers
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C.
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Wireless
communication
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11.
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Which one of the
following stocks represents industries with below-average sensitivity to the
state of the economy?
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12.
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The most widely used
monetary policy tool is _________.
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A.
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altering the
discount rate
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B.
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altering reserve
requirements
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C.
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open market
operations
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D.
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increasing the
budget deficit
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13.
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Which one of the
following is the ratio of actual output from factories to potential output
from factories?
|
A.
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Capacity
utilizationrate
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C.
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Durable goods
orders rate
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D.
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Industrial
production rate
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14.
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According to
__________ economists, the growth of the U.S. economy in the 1980s can be
attributed to lower marginal tax rates, which improved the incentives for
people to work.
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15.
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The market value of
all goods and services produced during a given time period is called
______.
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16.
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A big increase in
government spending is an example of a _________.
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17.
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GDP refers to
_________.
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A.
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the amount of
personal disposable income in the economy
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B.
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the difference
between government spending and government revenues
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C.
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the total
manufacturing output in the economy
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D.
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the total
production of goods and services in the economy
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18.
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Portfolio manager
Peter Lynch would classify Coca-Cola as _________.
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19.
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Attempting to
forecast future earnings and dividends is consistent with which of the
following approaches to securities analysis?
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C.
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Both technical
analysis and fundamental analysis
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20.
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The analysis of the
determinants of firm value is called _____________.
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21.
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Which of the
following companies is the best example of a turnaround?
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22.
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Inflation is caused
by ________________.
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B.
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rapid growth of the
money supply
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D.
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low rates of
capacity utilization
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23.
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Everything else
equal, if you expect a larger interest rate increase than other market
participants, you should _________.
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24.
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To obtain an
approximate estimate of the real interest rate, one must _________ the
__________ the nominal risk-free rate.
|
A.
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add; default
premium to
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B.
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subtract; default
premium from
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C.
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add; expected
inflation to
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D.
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subtract; expected
inflation from
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25.
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Which of the
following would not be considered a
supply shock?
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A.
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A change in the
price of imported oil
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B.
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Frost damage to the
orange crop
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C.
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A change in the
level of education of the average worker
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D.
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An increase in the
level of government spending
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26.
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If economic
conditions are such that very slow growth is expected in the foreseeable
future, one would want to invest in industries with __________ sensitivity to
economic conditions.
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D.
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Since growth is
expected to be slow, sensitivity to economic conditions is not an issue.
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27.
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Which of the
following is not an example of
fiscal policy?
|
A.
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Social Security
spending
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C.
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Fed purchases of
Treasury securities
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D.
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Changes in the tax
rate
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28.
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Supply-side economics
tends to focus on _______________.
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D.
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increasing
productive capacity
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