Question 1

An investment strategy which entails shifting the portfolio into industry sectors that are forecast to outperform others based on macroeconomic forecasts is termed ______________.

Accepted Answer

A)   sector rotation
B)   contraction/expansion analysis
C)   life cycle analysis
D)   business cycle shiftingE) None of the above
F) B) and D)

Question 2

The decline in the value of the dollar relative to the yen will have what impact on the purchase of U.S.goods in Japan?

Accepted Answer

A)   U.S. goods will increase in cost and Japan will import more.
B)   U.S. goods will increase in cost and Japan will import less.
C)   U.S. goods will decrease in cost and Japan will import more.
D)   U.S. goods will increase in cost and Japan will export less.E) C) and D)
F) A) and C)

Question 3

Everything else equal,an increase in the government budget deficit would ______.
I.increase the government's demand for funds
II.shift the demand curve for funds to the left
III.increase the interest rate in the economy

Accepted Answer

A)   II only
B)   I and II only
C)   I and III only
D)   I, II and IIIE) None of the above
F) C) and D)

Question 4

An expanding economy requires more workers.If the supply of workers becomes inadequate to meet the demand,what is the likely impact on the economy?

Accepted Answer

A)   An economic slowdown is likely
B)   Employment trends will reverse and unemployment will occur
C)   Government deficits will result from capacity utilization
D)   Inflation may result from upward wage pressuresE) B) and D)
F) B) and C)

Question 5

The yield curve spread between 10-year T-bond and federal funds rate is a _______ economic indicator.

Accepted Answer

A)   leading
B)   lagging
C)   coincident
D)   mixedE) A) and B)
F) B) and C) A

Question 6

Whenever OPEC attempts to influence the price of oil by significantly altering production,economists refer to this type of event as a ______________.

Accepted Answer

A)   demand shock
B)   equilibrium event
C)   expanding commodity event
D)   supply shockE) C) and D)
F) A) and B)

Question 7

If the economy is going into a recession,a good industry to invest in would be the __________ industry.

Accepted Answer

A)   automobile
B)   banking
C)   construction
D)   medical servicesE) A) and C)
F) C) and D)

Question 8

If the currency of your country is depreciating,this should __________ exports and __________ imports.

Accepted Answer

A)   stimulate; stimulate
B)   stimulate; discourage
C)   discourage; stimulate
D)   discourage; discourageE) All of the above
F) A) and C)

Question 9

Cash cows are typically found in the _________ stage of the industry life cycle.

Accepted Answer

A)   startup
B)   consolidation
C)   maturity
D)   relative declineE) B) and C)
F) None of the above

Question 10

Since 1999,the purchasing power of the U.S.dollar has increased relative to the purchasing power of _______.

Accepted Answer

A)   UK
B)   Euro
C)   Switzerland
D)   CanadaE) All of the above
F) None of the above

Question 11

Which one of the following is not a U.S.supply shock?

Accepted Answer

A)   Unions force an increase in national wage rates
B)   30% drop in oil supply from the Middle East
C)   Extended droughts reduce U.S. food production 25%
D)   Increases in Chinese purchases of U.S. exportsE) A) and C)
F) A) and B)

Question 12

Firm B produce gadgets.The price of gadgets is $2 each.Firm B has total fixed costs of $300,000 and variable costs of $1.40 per gadget.The corporate tax rate is 40%.What is the breakeven number of gadgets B must sell to make a zero after tax profit?

Accepted Answer

A)   300,000
B)   400,000
C)   500,000
D)   600,000E) A) and B)
F) A) and D)

Question 13

You would expect the beta of cyclical industries to be ______ and the beta of defensive industries to be ______.

Accepted Answer

A)   greater than 1; less than 1
B)   less than 1; less than 1
C)   less than 1; greater than 1
D)   greater than 1; greater than 1E) B) and C)
F) B) and D)

Question 14

The Conference Board's Consumer Confidence Index is released ______.

Accepted Answer

A)   daily
B)   weekly
C)   monthly
D)   quarterlyE) A) and D)
F) None of the above C

Question 15

If you are going to earn abnormal returns based on your macroeconomic analysis it will most likely have to be because __________.

Accepted Answer

A)   you have more information than others
B)   you are a better analyst than others
C)   you have the same information as others
D)   you are an equally good analyst as othersE) None of the above
F) B) and C)

Question 16

Stalwarts are typically found in the _________ stage of the industry life cycle.

Accepted Answer

A)   startup
B)   consolidation
C)   maturity
D)   relative declineE) C) and D)
F) None of the above

Question 17

Which of the following comprise barriers to entry?
I.Large economies of scale required to be profitable
II.Established brand loyalty
III.Patent protection for the firm's product
IV.Rapid industry growth

Accepted Answer

A)   I and II only
B)   I, II and III only
C)   II, III and IV only
D)   III and IV onlyE) B) and D)
F) None of the above B

Question 18

Which of the following describes the ratio of the number of people classified as out of work to the total labor force?

Accepted Answer

A)   The capacity utilization rate
B)   The participation rate
C)   The unemployment rate
D)   The natural rateE) B) and D)
F) None of the above

Question 19

Items that are ____________ and product purchases where ________ is not important tend to be less cyclical in nature.

Accepted Answer

A)   necessities; income
B)   luxuries; leverage
C)   discretionary goods; time of purchase
D)   produced with high fixed costs; entertainmentE) B) and C)
F) A) and B)

Question 20

Which one of the following is not a demand shock?

Accepted Answer

A)   Increase in government spending
B)   Increases in the money supply
C)   Reductions in consumer spending
D)   Improvements in education of U.S. workersE) None of the above
F) C) and D)

Exam 12: Macroeconomic and Industry Analysis

An investment strategy which entails shifting the portfolio into industry sectors that are forecast to outperform others based on macroeconomic forecasts is termed ______________.

Correct AnswerverifiedShow Answer

The decline in the value of the dollar relative to the yen will have what impact on the purchase of U.S.goods in Japan?

Correct AnswerverifiedShow Answer

Everything else equal,an increase in the government budget deficit would ______. I.increase the government's demand for funds II.shift the demand curve for funds to the left III.increase the interest rate in the economy

Correct AnswerverifiedShow Answer

An expanding economy requires more workers.If the supply of workers becomes inadequate to meet the demand,what is the likely impact on the economy?

Correct AnswerverifiedShow Answer

The yield curve spread between 10-year T-bond and federal funds rate is a _______ economic indicator.

Correct AnswerverifiedA

Whenever OPEC attempts to influence the price of oil by significantly altering production,economists refer to this type of event as a ______________.

Correct AnswerverifiedShow Answer

If the economy is going into a recession,a good industry to invest in would be the __________ industry.

Correct AnswerverifiedShow Answer

If the currency of your country is depreciating,this should __________ exports and __________ imports.

Correct AnswerverifiedShow Answer

Cash cows are typically found in the _________ stage of the industry life cycle.

Correct AnswerverifiedShow Answer

Since 1999,the purchasing power of the U.S.dollar has increased relative to the purchasing power of _______.

Correct AnswerverifiedShow Answer

Which one of the following is not a U.S.supply shock?

Correct AnswerverifiedShow Answer

Firm B produce gadgets.The price of gadgets is $2 each.Firm B has total fixed costs of $300,000 and variable costs of $1.40 per gadget.The corporate tax rate is 40%.What is the breakeven number of gadgets B must sell to make a zero after tax profit?

Correct AnswerverifiedShow Answer

You would expect the beta of cyclical industries to be ______ and the beta of defensive industries to be ______.

Correct AnswerverifiedShow Answer

The Conference Board's Consumer Confidence Index is released ______.

Correct AnswerverifiedC

If you are going to earn abnormal returns based on your macroeconomic analysis it will most likely have to be because __________.

Correct AnswerverifiedShow Answer

Stalwarts are typically found in the _________ stage of the industry life cycle.

Correct AnswerverifiedShow Answer

Which of the following comprise barriers to entry? I.Large economies of scale required to be profitable II.Established brand loyalty III.Patent protection for the firm's product IV.Rapid industry growth

Correct AnswerverifiedB

Which of the following describes the ratio of the number of people classified as out of work to the total labor force?

Correct AnswerverifiedShow Answer

Items that are ____________ and product purchases where ________ is not important tend to be less cyclical in nature.

Correct AnswerverifiedShow Answer

Which one of the following is not a demand shock?

Correct AnswerverifiedShow Answer

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A

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If the currency of your country is depreciating,this should exports and imports.

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You would expect the beta of cyclical industries to be and the beta of defensive industries to be .

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C

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B

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Items that are ____ and product purchases where is not important tend to be less cyclical in nature.

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