EIP Questions Flashcards
Technical Analysis is based on the beliefs of all of the following except:
a) Price moves in trends
b) History tends to repeat itself
c) Supply and demand
d) The strength of the economy affects prices
D
Which of the following is NOT necessary when using technical analysis?
a) Moving Averages
b) Trading Volumes
c) Peak Earnings
d) Peak Prices
C
Which of the following must be present when using technical analysis?
a) Historical prices
b) Charts
c) Earnings
d) Cash Flows
A
ABC Company issues a 5-year convertible bond of $1,000 par value with a coupon of 5%. The conversion ratio si 25. After 5years, the stock price fals to $30. What si the maximum net profit an investor can make per convertible bond he owns?
a) $0
b) $250
c) $500
d) $1000
B
Which type of fixed income securities can be prepaid before the maturity date? a) Government bonds
b) Callable bonds
c) Zero-coupon bonds d) Corporate bonds
B
Which type of fixed income securities has the lowest default risk?
a) Government bonds
b) Callable bonds
c) Zero-coupon bonds
d) Corporate bonds
A
Which type of fixed income securities is usually issued at a discount to par value?
a) Callable bonds
b) Junk bonds
c) Zero-coupon bonds
d) Government bonds
C
Which type of fixed income securities has the highest default risk?
a) Callable bonds
b) Junk bonds
c) Zero-coupon bonds
d) Corporate bonds
B
Which of the following is NOT a type of fixed income securities?
a) Government bonds
b) Interest rate swaps
c) Treasury bills
d) Corporate bonds
B
In the ____ stage, bonds are an attractive investment opportunity.
a) Recession
b) Recovery
c) Early Expansion
d) Late Expansion
D
In the ____ stage, real estate are an attractive investment opportunity.
a) Recession
b) Recovery
c) Early Expansion
d) Late Expansion
C
In the ____ stage, cyclical investments are an attractive investment opportunity.
a) Recession
b) Recovery
c) Early Expansion
d) Late Expansion
B
In the ____ stage, commodities and stocks are an attractive investment opportunity.
a) Recession
b) Recovery
c) Early Expansion
d) Late Expansion
A
Which of the following is NOT a stage in the business cycle?
a) Recession
b) Recovery
c) Expansion
d) Failure
D
The threat of substitute products increases as:
a) the price and performance of the substitute product can match the existing product
b) customers become comfortable with the existing product
c) the brand of the existing product is established
d) All of the above
A
The bargaining power of customers increases as:
a) the number of customers decreases
b) the volume of purchases increases
c) the number of alternative suppliers increases
d) the possibility of integrating backwards decreases
D
The bargaining power of a supplier increases when:
a) The resource they supply is scarce
b) The cost of switching to an alternative supplier is low
c) The supplier cannot integrate vertically
d) The supplier has very few customers
A
Which of the following will form a barrier to entry for new entrants ot an industry?
a) Low capital requirements
b) Easy access to suppliers and distribution channels
c) Strong branding
d) Low unit costs
C
Factors that act together to determine the nature of competition within an industry include:
i) Threat of new entrants to a market
ii) Bargaining power of suppliers iii) Bargaining power of customers
iv) Threat of substitute products
v) Strength of the overall economy
a) i, ii, iv, v
b) i ,ii, iii, iv
c) ,i iii, iv, v
d) All of the above
B
Which of the following industry life cycle phases is characterised by declining growth as demand shifts to other substitute products?
a) Pioneering Phase
b) Growth Phase
c) Maturity Phase
d) Deceleration Phase
D
Which of the following industry life cycle phases is characterized by above average growth, but no longer accelerating growth, increasing competition and declining profit margins?
a) Pioneering Phase
b) Growth Phase
c) Maturity Phase
d) Deceleration Phase
C
Which of the following industry life cycle phases is characterized by low demand for the industry’s product and large upstart costs?
a) Pioneering Phase
b) Growth Phase
c) Stabilization Phase
d) Deceleration Phase
A
Which of the following is NOT a phase of an industry life cycle?
a) Pioneering Phase
b) Growth Phase
c) Failure Phase
d) Deceleration Phase
C
The issuance of government bonds will:
a) decrease interest rates
b) increase aggregate demand for goods and services
c) both a and b
d) None of the above
D
Expansionary fiscal policy:
a) is usually undertaken when an economy is in equilibrium.
b) can be done by increasing government spending such that it is higher than tax revenue
c) can be done by decreasing government spending such that it is lower than tax revenue
d) cannot be done by any of the above methods
B
Which of the following is a type of fiscal policy that can be used to stimulate the economy?
a) Neutral
b) Expansionary
c) Contractionary
d) Al of the above
B
Fiscal policy makes use of changes to ____ in order to influence aggregate demand and the level of economic activity.
a) taxation rates
b) interest rates
c) lending rates
d) money supply
A
Fiscal policy to stimulate economic growth can include all the following actions, except:
a) Lowering tax rates
b) Increasing the number of jobs
c) Increasing government spending
d) Lowering interest rates
D
Controlling the money supply and interest rates can:
i) Control inflation
ii) Stabilize currency
iii) Grow the economy
iv) Reduce the amount of money that is spent by consumers
a) i
b) i, ii
c) i, ii, iii
d) All of the above
D