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Exam 12: Macroeconomic and Industry Analysis

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Question 41

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Attempting to forecast future earnings and dividends is consistent with which of the following approaches to securities analysis?

A) Technical analysis
B) Fundamental analysis
C) Both technical analysis and fundamental analysis
D) Indexing

E) All of the above
F) B) and C)

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Question 42

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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.

A) lose market share or reduce its profit margin
B) gain market share or reduce its profit margin
C) lose market share or increase its profit margin
D) gain market share or increase its profit margin

E) C) and D)
F) B) and C)

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Question 43

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The nominal interest rate is 6%.The inflation rate is 3%.The exact real interest rate must be _________.

An industry analysis for manufacturers of a small personal care gadget observed the following characteristics: 1. Industry sales have grown at 15-20% per year in recent years are expected to grow at 10-15% per year over the next three years, still well above the economic growth rate. 2. Some U.S. manufacturers are attempting to enter fast growing non-U.S. markets, which remain largely unexploited. 3. Some manufacturers have created a new niche in the industry by selling directly to customers through mail order. Sales for this industry segment are growing at 40% per year. 4. The current penetration rate in the U.S. is 60% of households and will be difficult to increase. 5. Manufacturers compete fiercely on the basis of price, and price wars within the industry are common. 6. Some manufacturers are able to develop new, unexploited niche markets in the U.S. based on company reputation, quality, and service. 7. Several manufacturers have recently merged, and it is expected that consolidation in the industry will increase. 8. New manufacturers continue to enter the market. -Characteristics _______ would be typical of an industry that is in the start-up stage.

Order the following stages in the industry life cycle from earliest to latest that occur after the start up phase ________. I.maturity II.relative decline III.consolidation

In macroeconomic terms an increase in the price of imported oil or a decrease in the availability of oil is an example of a _________.

Which one of the following is the ratio of actual output from factories to potential output from factories?

The federal government decides to pay for the transition to private social security accounts with a one time $1 trillion bond issue.What will be the biggest concern to businesses relative to the "crowding out" effect?

At what point in an industry life cycle are inefficiencies in competitors most likely to be removed?

Everything else equal,if you expect a larger interest rate increase than other market participants,you should _________.

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

______________ in interest rates are associated with stock market declines.

Which of the characteristics would be typical of an industry that is in the maturity stage?

In 1980 the dollar to yen exchange rate was about $0.0045.In 2007 the yen to dollar exchange rate was about 121 yen per dollar.A Japanese producer would have had to increase the dollar price of a good sold in the U.S.by _____ to maintain the same yen price in 2007.

The classification system used to classify firms into industries is now called the _____ code.

A firm in the early stages of its industry life cycle will likely have _________.

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.

Capital goods industries such as industrial equipment,transportation or construction would be good investments during the _____ stage of the business cycle.

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.

Firm A produces gadgets.The price of gadgets is $2 each.Firm A has total fixed costs of $1,000,000 and variable costs of $1.00 per gadget.The corporate tax rate is 40%.If the economy is strong,the firm will sell 2,000,000 gadgets.If the economy enters a recession it will sell only half as many gadgets.If the economy enters a recession,the after-tax profit of Firm A will be _________.