Chapter 7: Fundamental Analysis Flashcards
1
Q
Three steps involved in the “top-down” approach of fundamental analysis
A
- Macroeconomic analysis 2. Industry analysis 3. Company analysis
2
Q
Macroeconomic analysis
A
evaluates current overall economic environment and its effect on industry and company fundamentals
3
Q
Industry analysis
A
evaluates the outlook for particular industries
4
Q
Company analysis
A
evaluates a company’s strengths and weaknesses within its industry or industries
5
Q
Recent research shows that company analysis, on average, generates…
A
positive returns for mutual funds, but macroeconomic analysis does not
6
Q
A bottom-up approach simply develops fundamential analysis in the…
A
reverse direction
7
Q
Gross Domestic Product (GDP)
A
- How overall economic activity is most often measured 2. The market value of all officially recognized final goods & services produced within a country in a given period.
8
Q
What entity announces the GDP?
A
The Bureau of Economic Analysis in the Dept. of Commerce
9
Q
A
