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SIE > Economic Factors Quiz > Flashcards

Economic Factors Quiz Flashcards

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SIE Exam flashcards
1
Q

Who approves the fiscal policy of the United States?

A

Congress

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2
Q

The theory that reducing taxes and limiting government involvement in business activities stimulates economic growth is called

A

Supply side

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3
Q

Which best describe the federal funds rate?

A

Daily average of reserve member banks

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4
Q

Stimulating the economy through spending policies is known as

A

Keynesianism

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5
Q

An income statement

A

Covers financial activity over a period of time

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6
Q

Which of the following statements about the balance of payments is true?

A

It is the sum of all transactions between a country and the rest of the world over a specified period of time.

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7
Q

Which of the following is a coincident indicator?

A

Index of industrial production

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8
Q

Which of the following is not included in the current assets section of a balance sheet?

A

Goodwill

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9
Q

Which of the following best describes GNP?

A

GDP plus income earned by residents from overseas minus income earned within the domestic economy by overseas residents

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10
Q

A corporation with a low common stock ratio is

A

More vulnerable to interest rate changes

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11
Q

The bond ratio measures

A

The amount of corporate capitalization that comes from long term debt

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12
Q

Gross domestic product (GDP) is

A

The sum of all goods and services produced in the US computed in real dollars

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13
Q

All of the following are true of the organization making structure of a balance sheet

A

The net worth section is below the liabilities section
It is arranged from current items at the top to long term items at the bottom
It follows an equation

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14
Q

Which of the following is a lagging indicator?

A

Average prime rate

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15
Q

To determine a corporations profitability year over year which of the following is most suitable?

A

Profit ratio

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16
Q

Which of the following is a coincident indicator?

A

GDP

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17
Q

Which of the following components reconcile cash flow to net income?

A

Depreciation and amortization

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18
Q

Which of the following statements about the balance of payments is true?

A

It is the sum of all transactions between a country and the rest of the world over a specified period of time.

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19
Q

Which situation would cause U.S. exports to become less competitive than foreign exports?

A

The U.S. dollar strengthens when compared to foreign currencies.

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20
Q

Which of the following is considered a coincident economic indicator?

A

Index of industrial production

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21
Q

If the gross domestic product of one year is compared to the GDP of another year the comparison would be most valid if it were made

A

In constant dollars

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22
Q

Which of the following is a lagging indicator?

A

Average prime rate

23
Q

Open market operations of the federal reserve board cause direct changes in

A

M1

24
Q

A heavily leveraged corporation has which of the following?

A

High debt/ equity ratio

25
Q

Which of the following industries is least defensive?

A

Automobile production

26
Q

If the federal reserve board through the FOMC (Federal Open Market Committee) lowers the discount rate which of the following will decline?

A

T bill rate

27
Q

Which of the following would most likely benefit from a sustained decline in interest rates?

A

Federal savings banks
Broker dealers
Utilities and airlines

28
Q

All of the following are lagging indicators

A

Employment
Automobile sales
Appliance sales

29
Q

The fed funds interest rate is the interest rate that

A

One bank charges another for overnight borrowing

30
Q

To determine a corporations profitability year over year which of the following is most suitable?

A

Profit ratio

31
Q

What ratio would an analyst consider when evaluating a corporations ability to service its debt?

A

Interest coverage ratio

32
Q

The current ratio formula is

A

Current assets ➗ current liabilities

33
Q

Which of the following is considered to be a lagging indicator of economic trends?

A

Unemployment

34
Q

Which situation would cause the U.S. exports to become less competitive than foreign exports?

A

The U.S. dollar strengthens when compared to foreign currencies

35
Q

Which of the following components reconcile cash flow to net income?

A

Depreciation and amortization

36
Q

Which of the following statements is true about the balance of payments?

A

It is the sum of all transactions between a country and the rest of the world over a specified period of time.

37
Q

Which of the following would increase us exports?

A

Weakening dollar

38
Q

Which of the following is part of a corporation capital structure?

A

Debentures
Preferred stock
Paid in capital surplus

39
Q

Which of the following discloses the assets available to common stock?

A

Book value per share

40
Q

What is the term for a 6 month consecutive downturn in the economy?

A

Recession

41
Q

The normal business cycle starts with

A

Expansion

42
Q

Which measures a corporations solvency?

A

Working capital

43
Q

The quick ratio is

A

A more stringent measure than the current ratio

44
Q

One way an analyst evaluated management efficiency is by reviewing the

A

Return on common equity

45
Q

Fully diluted earnings per share

A

Is a smaller number than EPS

46
Q

Which of the following industries is most cyclical?

A

Home appliances

47
Q

EPS measures

A

Earnings available to common stockholders

48
Q

Which of the following is the quick ratio?

A

The acid test

49
Q

The current ratio formula is

A

Current assets ➗ current liabilities

50
Q

The bond ration measures

A

The amount of corporate capitalization that comes from a long term debt

51
Q

Which of the following indicates the generosity of the board of directors?

A

Dividend payout ratio

52
Q

All of the following are examples of defensive industries

A

Building materials

53
Q

An analyst comparing the stock prices of two similar market competitors would most be interested in their

A

P/E ratio

54
Q

Which of the following have currency risks?

A

American depositary receipts

SIE (23 decks)

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