Unit 3 Checkpoint
Yield Curve Analysis Shows
Bonds of single issuer over varying maturities
Large Cap Stocks To Reduce Systematic Risk
Buy broad index options Lower standard deviation Reduce correlation coefficient
When a company recognizes a sale only when payment is made, it is using which form of accounting?
Cash
When an analyst adds back the current year's depreciation to the net income, she is computing the company's
Cash flow from operations
If Value Of US Dollar Decrease
Domestic goods more competitive Foreign goods less competitive
Inflation Risk
Fixed income is susceptible
Under the net present value (NPV) method of evaluating investments, an investment is acceptable if the net present value of the expected returns is
Greater than zero
Liquidity Risk
Municipal bonds
Cash Flow From Operations
Net income + depreciation deduction
With respect to the fiscal policy of the United States, the annual budget request is submitted by the
President
Inflation Inertia
Price will rise slowly then rise fast
High Unemployment Shows
Reduction in inflation
Lower Interest Rates
Result of inflation, not cause or predictor
Limit Business Risk
S & P Index