Unit 14 Flashcards
Fill in the blanks with low or high:
Defensive stocks traditionally have _____ betas, _____ levels of retained earnings, _____ dividend payout ratios, and a _____ growth of earnings per share.
Defensive stocks traditionally have LOW betas, LOW levels of retained earnings, HIGH dividend payout ratios, and a LOW growth of earnings per share.
New claims for unemployment insurance are considered to be a _________ economic indicator.
leading
Debt-to-Equity Ratio
Measures a company’s leverage.
Total Debt ÷ Total Equity
The balance sheet contains 3 main categories:
assets, liabilities, and net worth (stockholders’ equity)
______________ is a method of adjusting financial values and economic performance for the changing value of a dollar.
Constant dollar
Also referred to as inflation-adjusted or real dollar
The difference between a corporation’s current assets and its current liabilities is the:
Working capital
What does the price-to-book ratio measure?
The market value of a company’s stock relative to the accounting value of the company
A yield curve that rises as maturities lengthen is a
normal yield curve
An individual who primarily invests in securities that have a low dividend payout ratio, a high level of retained earnings, and a high price-to-earnings ratio would be described as a:
growth investor
The best measure of short-term liquidity is the __________, which is calculated by……………
current ratio; dividing current assets by current liabilities
How is the book value of a company calculated?
Total Assets - Total Liabilities
Earnings per share calculation
(Net Income – Preferred Dividends) ÷ Number of Outstanding Common Shares
How to calculate Price-to-Earnings Ratio
Market price ÷ Earnings Per Share
During which phase of the business cycle will an investor experience a decrease in purchasing power?
Peak
If the U.S. dollar is in a decline against foreign currencies, U.S. goods will be (more/less) expensive to foreigners.
less
The ____________ is what’s charged on an overnight loan of reserves between member banks.
Federal funds rate
During periods of deflation, the FRB will likely:
Purchase securities in the open market
When a company is financed with debt that is considered ______
leverage
If an analyst wants to measure the degree to which a company or partnership is leveraged, he would calculate the _______
debt-to-capital or debt-to-equity ratio
Short interest is a statistic used by _______ analysts.
technical
The amount of money an issuer receives in a stock offering in excess of the par value is recorded on the balance sheet as:
capital surplus
A recession occurs when Real GDP declines for __ successive quarters
2
Value investing is risky because it is ______________
contrarian
This is a company’s quarterly report that provides less detail than its Form 10-K. A
company must file it within 35 days of the end of each of its first three quarters. However, results for the last quarter are included in the company’s annual report.
Form 10-Q
________ is filed with the SEC within four business days of the occurrence of any event that could materially affect a company’s share price or financial condition
Form 8-K
