Missed UNIT 2 check point questions

An analyst reviewing a company's financial statements would examine the footnotes to

) discover any pending legal action against the company

With respect to the fiscal policy of the United States, the annual budget request is submitted by the

) president

If disposable personal income has fallen steadily over the past year, which of the following is most likely going to be affected?

Automotive industry

When a company recognizes a sale only when payment is made, it is using which form of accounting?

Cash

All of the following are considered to be components of cash flow EXCEPT

banking activities

When an analyst adds back the current year's depreciation to the net income, she is computing the company's

cash flow from operations

A decrease in the value of the monetary unit is just a way of defining

inflation

Proponents of the concept of inflation inertia believe that

prices will rise slowly and then begin to increase at a faster rate

All of the following are tools that may be employed by the Federal Reserve in an effort to control the economy EXCEPT

the prime rate

A recession is defined as a drop in GDP for:

two consecutive quarters.

An investor using yield curve analysis would expect to view bonds of

a single issuer over varying maturities

Under SEC rules, Form 8-K must be filed

within 4 business days of the event

In order to be in compliance with SEC reporting rules, a company will typically file a Form 10-Q how many times during its fiscal year?

3 times

The research department of an investment advisory firm forecasts that the current business cycle should reach its peak within the next 2 months. Under such circumstances, which of the following portfolio adjustments would be most suitable for the firm's customers who actively invest in common stocks?

Defensive stocks

From first to last, in what order would claimants receive payment in the event of bankruptcy?

Secured debt, general creditors, subordinated debentures, preferred stockholders

Some prominent stock market pundits are predicting that the economy will slide into a recession in the near future. Furthermore, they are expecting moderate deflation during the same period. If this were to happen, your clients would probably enjoy the greatest overall return from investing in

U.S. Treasury bonds

When investors tend to increase their investments in debt securities on the short end of the spectrum, it generally leads to

a positive yield curve

Liquidity risk would be greatest for an investor whose portfolio was primarily composed of

municipal bonds

When the 91-day Treasury bill rate is 3%, an investor decides to purchase a 20-year corporate bond at par with a coupon of 8%. If the corporate bond does not pay as expected, the investor's potential loss is considered

opportunity cost

To stimulate a sluggish economy using fiscal policy measures, policymakers would

reduce income taxes