fund and tech #3 04/17/18

The working capital of a corporation includes all of the following EXCEPT: A)convertible bonds. B)accounts receivable. C)marketable securities of other companies. D)cash.

****A)convertible bonds.

All of the following ratios are measures of the liquidity of a corporation EXCEPT A)current ratio. B)acid-test ratio. C)quick ratio. D)debt/equity ratio.

***D)debt/equity ratio.

All of the following appear on a corporation's balance sheet as fixed assets EXCEPT: A)computer equipment. B)inventory. C)furniture. D)real estate.

B)inventory. Inventory is considered a current asset, not a fixed asset

________________ involves examination of long-term debt and stock issues.

Capitalization analysis

an increase in which of the following economic indicators would predict a decrease in business activity?

Levels of inventories. The buildup of inventories is a disincentive for manufacturers to produce more goods and, therefore, may indicate a decrease in business activity

_________________ involves examining current assets and liabilities from the balance sheet

Liquidity analysis

_________________ would involve examining the balance sheet's current assets and current liability entries

Working capital analysis

A technical analyst is not concerned with

a stock's intrinsic quality or PE ratios and earnings per share.

The S&P 100 Index and the Wilshire Index are examples of ______________________

broad-based indexes. Broad-based indexes attempt to reflect the status of the market as a whole, not the status of particular market segments such as a gold or oil index.

An analyst comparing revenues with expenses is most likely analyzing

cash flow. The analyst is most likely measuring the income statement for cash flow (money coming in against money going out)

Which of the following may be affected when a company buys machinery for cash? Shareholders' equity. Current assets. Total liabilities. Working capital.

current assets and working capital. The purchase of machinery for cash will reduce current assets and working capital.

The US gross domestic product (GDP) consists of the annual sum of all goods and services produced within the nation. It includes: personal consumption, private investment, foreign investment, net exports and all A)wages paid to employees. B)Treasury securities issued. C)federal debt. D)government purchases.

government purchases. The gross domestic product includes everything produced in the United States in a year, whether used domestically, shipped abroad, or sold to the government

he economy has gone through three consecutive quarters of economic decline with no immediate end in sight, and therefore could be said to be

in a Recession. Recession is defined as 2 or more consecutive quarters of economic decline. It would have to be at least 6 quarters to be considered a depression.

Both the S&P 500 and housing permits are

leading economic indicators,

Economic indicators can be ___________, ____________, or _____________ which indicates the timing of their changes relative to how the economy as a whole changes.

leading, lagging, or coincidental,

If the Federal Reserve Board tightens the money supply, this will

push interest rates up make access to credit and loans more difficult for consumers

When interest rates rise, the prime rate increases, bond yields ______, and bond prices

rise drop

To curb excessive economic activity, the Fed would:

sell securities in open market operations. The Federal Open Market Committee can take money out of circulation during inflationary times through the sale of securities to primary dealers

Higher interest rates have a tendency to ___________corporate growth, with a resulting slowdown in earnings;

slow down

A significant increase in imports of foreign goods into the United States would have what effect on the strength of the US dollar?

weaken

Which of the following is the CORRECT order of the stages in a business cycle

Expansion, peak, contraction, trough.

The Federal Reserve Board foresees the probability of an overheated economy and the resumption of double-digit inflation. Therefore, the FRB takes actions to slow down the economy, including increasing the discount rate. Which of the following are likely effects of these moves? 1.An increase in the prime rate. 2.An increase in bond yields and an accompanying decrease in bond prices. 3.A slowdown in corporate growth. 4.A decrease in corporate earnings.

I, II, III and IV. The FRB attempts to slow down the economy and decrease the money supply with a corresponding increase in interest rates. When interest rates rise, the prime rate increases, bond yields rise, and bond prices drop. Higher interest rates have a tendency to slow down corporate growth, with a resulting slowdown in earnings; these events occur in this approximate sequence.

According to Keynesian economic theory, an economy's health can be ensured if the government

increases aggregate demand. Keynesians theorize that government efforts to increase aggregate demand by increasing purchases of goods and services result in the healthiest economy. In general, higher taxes and higher government spending lead to favorable economic conditions.

When interest rates rise, the prime rate _________, bond yields rise, and bond prices drop.

increases,