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A customer in a low tax bracket has just inherited $10,000 and is looking for an investment that will provide current income and liquidity. The BEST recommendation is a: A. Corporate Bond ETF B. Variable Rate Bond C. Municipal Bond Fund D. Treasury STRIPS

A. Corporate Bond ETF The Corporate Bond ETF is liquid because it is exchange traded, and it provides taxable income from its bond investments. Because the customer is in a low tax bracket, lower yielding tax-free municipal bond investments are not appropriate. Variable rate bonds would be good investment if it is expected that interest rates would rise (a point not addressed in this question), but direct bond investments are not that liquid, unless they are Treasury or Agency bonds. Treasury STRIPS are a liquid investment (a ready market exists at all times and they are easy to trade with low transaction costs), but they do not give current income. These are zero-coupon issues.

Equity securities of which issuer are the LEAST defensive? A. Defense B. Pharmaceuticals C. Grocers D. Utilities

A. Defense A defensive industry is one which is not greatly affected by economic downturns. Pharmaceuticals, grocers, and utilities are all defensive. If the economy sours, people still buy drugs, food, and use electricity. The defense industry is the least defensive of the choices offered. In periods of economic slowdowns, the government collects less taxes, and tends to reduce arms and expensive defense systems orders.

A technical analyst would evaluate all of the following EXCEPT: A. Earnings trends B. Chart movements C. Trading volumes D. Advance / Decline ratios

A. Earnings trends Fundamental analysts select investments based on fundamentals such as earnings trends, balance sheet strength (liquidity ratios), management etc. Technical analysts select investments based on chart movements, trading volumes, advance / decline ratios etc.

If the balance of payments is running a deficit, which of the following statements are TRUE? I More U.S. dollars are being spent abroad than in the U.S. II Fewer U.S. dollars are being spent abroad than in the U.S. III There are increasing levels of net imports of foreign goods in the U.S. IV There are decreasing levels of net imports of foreign goods in the U.S. A. I and III B. I and IV C. II and III D. II and IV

A. I and III If the balance of payments is running a deficit, then more U.S. Dollars are being spent abroad for foreign goods and services than are being spent in the United States by foreigners for domestic goods and services. Increased levels of U.S. imports will cause more dollars to leave the U.S., widening the deficit.

Speculators in foreign currencies would NOT be subject to which of the following risks? A. interest rate risk B. exchange rate risk C. market risk D. political risk

A. interest rate risk Interest rate risk only affects fixed income securities. As interest rates rise, the stream of future fixed interest payments and final principal repayment are devalued, reducing the current value of the bond. This risk would not affect foreign currencies, which do not give investors an income stream. Speculators in foreign currencies are simply placing bets on the future value of that currency. They assume political risk, exchange rate risk, and market risk. Market risk in this case is simply the risk of being on the wrong "side" of the market - e.g., being long the currency only to have its value fall; or short the currency only to have its value rise.

A customer holds a large portfolio of corporate bonds. The customer is worried about capital risk. Which diversification strategy would be least effective to minimize capital risk for this customer? A. Diversification among differing issuers in differing states B. Diversification among differing denominations C. Diversification among differing industries D. Diversification among differing maturities

B. Diversification among differing denominations Effective methods of diversifying away the unsystematic risk of a portfolio would be to diversify among different issuers, different states, and different industries. Thus, if one issuer, industry or economic region has problems, this would only affect a small portion of the portfolio. Diversification among differing maturities also provides a measure of risk management. If market interest rates rise, short term maturities (under 1 year) will decline in price by a minimal amount compared with longer maturities. Thus, a mix of maturities helps to minimize capital risk. Bond denominations have no bearing on diversification.

An investor holds an international bond fund. Regarding the performance of the fund, which of the following statements are TRUE? I If the foreign currency value rises against the dollar, the fund's Net Asset Value will increase II If the foreign currency value rises against the dollar, the fund's Net Asset Value will decrease III If the dollar falls against the foreign currency, the fund will have an inferior performance relative to dollar denominated funds IV If the dollar falls against the foreign currency, the fund will have a superior performance relative to dollar denominated funds A. I and III B. I and IV C. II and III D. II and IV

B. I and IV An international bond fund will have securities that are denominated in foreign currencies. If the foreign currency value rises against the dollar, then when the fund's NAV is converted into dollars, proportionately more dollars will be created, since each unit of foreign currency buys more dollars. Similarly, if the U.S. Dollar drops against the foreign currency, when the fund's NAV is converted into dollars, proportionately more dollars will be created, since each unit of foreign currency buys more dollars.

A counter-cyclical stock would be characterized by which of the following? I Earnings variability due to changes in economic growth II No earnings variability due to changes in economic growth III A stock price that tends to move in the same direction of the market as a whole IV A stock price that tends to move in the opposite direction of the market as a whole A. I and III B. I and IV C. II and III D. II and IV

B. I and IV Counter-cyclical stocks are those whose performance runs counter to the economic cycle. In good economic times, these stocks don't do as well; in poor economic times, these stocks do very well. An example of a counter-cyclical stock is a basic food producer - in good times, people eat out more and do less cooking at home; in bad times, people eat out less and do more cooking at home. Thus, in bad times, the earnings of a basic food producer would improve, and its stock price would rise. In good times, the earnings of a basic food producer would deteriorate, and its stock price would fall. WRONG SERIES SMART PLUS 7 The best answer is A. The performance of cyclical stocks follows the business cycle. In times of GDP expansion, they do well; in times of recession, they do poorly. Their earnings and stock prices follow the economic cycle. The classic cyclical stocks are home building, automobile manufacturers and durable goods producers. All of these purchases are deferrable in hard times.

A 60 year old customer desires an investment that will provide for retirement income when she reaches age 65. The customer is able to invest $1,000 per month over that time period. Which of the following recommendations is most suitable? A. The purchase of income bonds B. The purchase of a variable annuity contract C. The purchase of government bonds in an IRA account D. The purchase of high yield bonds

B. The purchase of a variable annuity contract A variable annuity contract places no dollar limit on contributions; and the income earned on investments is tax deferred during the accumulation period. Thus, the customer would be allowed to contribute $12,000 per year; and would receive the benefit of the tax deferred build up. At age 65, she could annuitize and convert the value of the account into an annuity contract that would make payments for her life. This is the best choice offered. Income bonds only pay income if the corporation earns enough, so these are not suitable for retirement income. An IRA account only allows a $5,500 contribution for an individual in 2017, so this does not meet the customer's desire to invest $12,000 per year. Finally high yield bonds are speculative, and are not suitable for retirement income.

If the United States balance of payments goes from a surplus to a deficit position, the value of the U.S. dollar should: A. appreciate B. depreciate C. fluctuate D. stagnate

B. depreciate If the United States imports more from foreign countries than is exported, then there is a balance of payments deficit. There is a net outflow of dollars from the United States into foreign hands. If the foreign holders choose to invest these dollars outside the United States, then they will sell their U.S. dollars (lowering the U.S. Dollar's value) and buy foreign currencies to pay for investments made outside the United States. Thus, the balance of payments going from a surplus to a deficit position will weaken the U.S. dollar.

The U.S. balance of payments deficit would widen for all of the following reasons EXCEPT: A. dividend payments by U.S. issuers to foreign holders of those securities increase B. purchases of U.S. securities by foreigners increase C. exports of domestic goods to foreign countries decrease D. imports of foreign goods into the United States increase

B. purchases of U.S. securities by foreigners increase Increased purchases of U.S. securities by foreigners brings funds into the U.S., narrowing the balance of payments deficit. Increased dividends paid to foreigners means that more funds are taken out of the U.S.; decreased exports of U.S. goods means that less funds are coming into the U.S.; and increased imports means that more funds are leaving the U.S. All would increase the balance of payments deficit.

Which of the diversification factors below will not reduce the non-systematic (credit) risk of a bond portfolio? A. Maturity B. Industry in which issuer operates C. Coupon rate D. Geographic location of issuer

C. Coupon rate The coupon rate has no bearing on diversification to reduce potential credit risk. In the trading market, the price of a bond is determined by the market yield for that type of security - not the coupon rate. To reduce non-systematic risk (meaning the risk that any one security may be a "bad" investment), diversification of a bond portfolio by choosing different issuers, different industries, different geographic issuer locations, and different maturities (since long term bonds give issuers longer time periods in which they can go broke) are all valid.

Which of the following would be least important in determining the level of diversification in a corporate bond portfolio? A. Bond ratings B. Industries represented in portfolio C. Domicile of issuers D. Maturities of the bonds in the portfolio

C. Domicile of issuers The "domicile" of an issuer is the state where the issuer legally resides. It has no bearing on the quality of the issuer's securities. Bond rating, type of industry, and maturity would all be considered when examining the diversification of a bond portfolio.

Which of the following stocks would be considered counter-cyclical? A. Automobile manufacturer B. Pharmaceutical manufacturer C. Gold mining company D. Computer software developer

C. Gold mining company The performance of counter-cyclical stocks moves opposite to the economic cycle. Gold mining stocks are counter-cyclical. In bad economic times, people "flee to safety," selling stocks that are adversely affected in bad times and buying gold stocks - since gold tends to hold its value in good times or bad. In contrast, the performance of cyclical stocks follows the business cycle. In times of GDP expansion, they do well; in times of recession, they do poorly. The classic cyclical stocks are home building, automobile manufacturers and durable goods producers. All of these purchases are deferrable in hard times. Pharmaceutical companies are defensive and are not affected by the business cycle; in good times or bad, people must take prescribed drugs. Computer software companies are growth companies.

Diversification among multiple asset classes reduces the: I market risk of the portfolio II marketability risk of the portfolio III standard deviation of portfolio returns A. I only B. II and III only C. I and III only D. I, II, III

C. I and III only Diversification of a portfolio reduces market risk; and also reduces the variability of investment returns. It does not affect marketability risk - that is, how difficult is it to liquidate given position in the portfolio.

Which of the following statements are TRUE about the interbank market? I Foreign currency values are determined in this market II The market is centralized III Trading is regulated IV Foreign policy actions affect values in the market A. I only B. II and III C. I and IV D. I, II, III, IV

C. I and IV The Interbank market is a free wheeling, unregulated, worldwide currency trading market open 24 hours a day. It is completely unregulated, but is influenced by central bank trading. Central bank trading actions are directed by each country's government.

A young couple wishes to save $50,000 as the down payment on a new house that they plan to purchase in the next 6 months. Which of the following are suitable investment vehicles to recommend to the couple? I Money market funds II Bank certificates of deposit III Blue chip stocks IV Commercial paper A. I only B. II and III C. I, II and IV D. I, II, III, IV

C. I, II and IV This couple needs $50,000 cash in 6 months. Clearly, money market funds and bank certificates of deposit are suitable. Blue chip stocks are not suitable, since they are subject to market risk. Commercial paper is usually not marketed to individuals; it is mainly an institutional market. However, some corporations sell commercial paper directly to customers in minimum $10,000 units via their websites. This is another very safe short term investment, and is suitable.

Which of the following economic events would have a negative long term impact on common stock prices? I Rising interest rates II Rising capital gains tax rates III Rising employment rates IV Rising inflation rates A. I and II only B. III and IV only C. I, II, IV D. I, II, III, IV

C. I, II, IV Rising interest rates are bad for stock prices. More investors will switch from investments in stocks to bond investments. A rising capital gains tax rate also makes stocks less attractive to investors (why would an investor want to invest in stocks if the capital gains tax is so high?) Rising employment indicates that the economy is expanding. This is bullish (not bearish) for corporate profits and hence, stock prices. Rising inflation means that interest rates are likely to rise. This makes long term debt unattractive due to their greater price volatility in response to market interest rate changes and also makes stocks unattractive since corporations are not able to increase prices in line with rising costs, hurting profits. In inflationary times, investors switch from stocks and long term bonds to money market instruments which are paying current high rates of interest; and "hard" assets such as gold and real estate that tend to keep up with inflation.

A head and shoulders "top" formation is: I Bullish II Bearish III Reverse Upward Trend IV Reverse Downward Trend A. I and III B. I and IV C. II and III D. II and IV

C. II and III A head and shoulders top formation is bearish since the market has topped out and is trending down. It is an uptrend that has reversed itself.

Which of the following is an indicator of "market sentiment"? A. Daily trading volume B. Daily trading price range C. Number of bullish investors versus number of bearish investors D. Number of new listings on the New York Stock Exchange versus number of delistings

C. Number of bullish investors versus number of bearish investors The principal "Market Sentiment" (that is, market direction) indicators are the advance / decline ratio and the put / call ratio. Both of these indicators measure the relative number of bullish investors (as indicated by advancing prices or call purchases) relative to the number of bearish investors (as indicated by declining prices or put purchases). Trading volumes and price ranges do not indicate market direction; nor do the number of new listings versus the number of delistings.

A growth investor would consider a company's: A. Price / Earnings ratio B. Price / Book Value ratio C. Stock price appreciation rate D. Market share

C. Stock price appreciation rate Growth investors select investments based simply on growth in earnings or growth in market price; on the assumption that these will always be the best performing investments. Value investors invest in undervalued companies - as measured by low Price/Earnings ratios and low Price/Book Value ratios - that have good market prospects. Thus, they also consider product line, market share, management, etc.

Passive portfolio management is: A. buying and holding the investments chosen by the Registered Representative B. determining the securities to be bought or sold based on investment research performed by the Registered Representative C. managing a portfolio to meet the performance of a benchmark portfolio D. managing a portfolio to exceed the performance of a benchmark portfolio

C. managing a portfolio to meet the performance of a benchmark portfolio Passive portfolio management is the management of a portfolio to meet the performance of a benchmark, such as a designated index. Active portfolio management attempts to beat the performance of the benchmark portfolio through better security section and better investment timing.

When a manager liquidates securities out of one asset class and invests the proceeds in another asset class to maintain the desired asset allocation percentages as market prices move, the manager is: A. strategically managing the portfolio B. tactically managing the portfolio C. rebalancing the portfolio D. optimizing the portfolio

C. rebalancing the portfolio Once asset allocation percentages are set in a portfolio and funding is complete; the actual percentage composition of the portfolio can shift due to the relative performance of each asset class. For example, assume that equities are set at 30%; and fixed income securities are set at 70%; of the portfolio's value. Also assume, that over the next 6 months, there is a bull market, and the stock portion of the portfolio rises to 45% of total value; while fixed income investments now are at 55% of total value. The portfolio must be rebalanced by selling equities and investing the proceeds in fixed income securities to bring the relative percentages back to 30/70.

The "Efficient Market Theory" states that: A. practitioners of fundamental analysis should realize superior investment returns as compared to technical analysts B. practitioners of technical analysis should realize superior investment returns as compared to fundamental analysts C. securities selection based on technical or fundamental factors is irrelevant since prices reflect all available information D. securities selection based on both fundamental and technical analysis will result in superior returns

C. securities selection based on technical or fundamental factors is irrelevant since prices reflect all available information The "Efficient Market" Theory holds that prices of securities in the market fully reflect all publicly available information, so that undervalued or overvalued securities should not exist. Thus, securities selection based on any type of analytical method is irrelevant. In reality, most individuals believe that the market is only "partly" efficient in pricing securities - so that undervalued and overvalued securities will always exist. These could be identified by both fundamental and/or technical analysis.

An older female customer, in the lowest tax bracket, wants an investment that will provide asset growth for retirement. The best recommendation would be: A. Emerging markets fund B. Single stock C. Municipal bond D. Index fund

D. Index fund A municipal bond is not appropriate for a low tax bracket customer and it does not give growth. An emerging markets fund certainly offers high growth, but it also high risk and this customer is "older." A single stock might be a great investment, but there is no diversification. An index fund gives growth potential with diversification and is the best of the choices offered.

Currency valuation in the interbank market is affected by all of the following EXCEPT: A. Intervention B. Revaluation C. Devaluation D. Intermediation

D. Intermediation Currency values in the interbank market are affected by central bank intervention (e.g., the Bank of Japan bolsters the yen by making large purchases); by currency revaluation (e.g., Mexico revalues the Peso against the dollar, changing the official exchange rate); and by devaluation of the currency (which is simply the market mechanism pushing values down). Intermediation is a U.S. banking term that describes periods when deposits flow into "time accounts" at banks - this typically occurs when interest rates are low. Deposits flow out of banks when interest rates are high (e.g., money funds paying higher rates) - this is known as "disintermediation".

A self-employed client has an annual income of $200,000 and is in a high tax bracket. He is not covered by a retirement plan and would like to make the maximum contribution to one to reduce his taxable income. He believes that he will be in a lower tax bracket once he retires. The BEST recommendation is to contribute to a: A. Traditional IRA B. Roth IRA C. 401(k) D. SEP IRA

D. SEP IRA A Roth IRA does not work for 3 reasons - the maximum contribution is only $5,500 (in 2017); the contribution is not deductible; and this person is a high earner and cannot use a Roth. He can use a Traditional IRA, but it only allows for a maximum contribution of $5,500. A 401(k) plan allows for a larger deductible contribution ($18,000 in 2017), but it is really designed for big companies because it is expensive to set up and run. It does not really work for self-employed persons. A SEP (Simplified Employee Pension) IRA is designed for self-employed individuals and small employers. It is easy to set up and administrate and it allows for maximum contribution equal to 20% of income (25% statutory rate), capped at $54,000 in 2017. It would allow this self-employed individual to make a 20% x $200,000 = $40,000 deductible contribution.

All of the following are contrarian market theories EXCEPT: A. short interest theory B. put/call ratio theory C. odd lot theory D. efficient market theory

D. efficient market theory

Growth investors: A. seek to find investments that are undervalued by the market B. determine the value of a security through fundamental analysis C. invest in securities included in growth funds D. make their investment decision based upon the market performance of the security

D. make their investment decision based upon the market performance of the security

A wealthy, sophisticated investor with a high risk tolerance has just turned extremely bullish on the market. To profit from this, the BEST recommendation to the client would be to: A. sell index calls B. sell index puts C. sell inverse floaters D. sell leveraged inverse ETFs

D. sell leveraged inverse ETFs This customer has just turned "extremely bullish" on the market, meaning he thinks that equities are going to rise rapidly in price. The customer is wealthy, sophisticated, and has a high risk tolerance. The most aggressive choice offered is to short the leveraged inverse ETF. Assume it is a 300% leveraged inverse ETF based on the S&P 500 Index. If the index rises by 15%, this ETF should fall by 3 x 15% = 45%. This would give the customer a large profit on a short position in that ETF. (Of course, if the customer is wrong and the index falls, then the customer loses big time!) Also note that an inverse floater is a type of bond where when market interest rates rise, its interest rate "floats" and is adjusted downwards by the increase in interest rates; and vice versa. When interest rates rise, its interest rate will "float" down; and when interest rates fall, its interest rate will "float" up. These bonds will be more volatile in price movement than fixed rate bonds, but they are not tested, other than being a wrong answer!

Passive asset management is: A. buying securities positions and holding them to the liquidation date of the portfolio B. buying securities positions and holding them until pre-established prices are reached C. selecting securities to be purchased for each asset class based upon fundamental analysis D. using index funds as the investments for each asset class

D. using index funds as the investments for each asset class Passive asset management does not mean that there is no management. Passive asset management is the use of index funds (which are managed to mirror a chosen index benchmark) as the security selections within an asset class. Thus, the actual specific security selection and management is embedded within the index fund chosen for investment.

If the real Gross Domestic Product of the G-20 countries is growing at a slower rate than real Gross Domestic Product growth in the United States, then the value of the U.S. dollar can be expected to: A. appreciate B. depreciate C. fluctuate D. stagnate

A. appreciate The G-20 countries are the major industrialized nations of the world. If the Gross Domestic Product of the other G-20 countries is growing at a slower rate than the GDP growth in the United States, then the United States is doing "better" than those countries and the U.S. dollar will appreciate in value relative to those currencies.

Active asset managers select investments based primarily upon: A. inefficient market pricing of the investment B. efficient market pricing of the investment C. minimum time needed to achieve projected investment returns D. minimum number of investments needed to achieve projected investment returns

A. inefficient market pricing of the investment Active asset managers believe that by performing fundamental analysis, they can find undervalued companies - that is, companies that are not "efficiently priced". Passive asset managers believe that the market is basically efficient, and that one cannot consistently find "undervalued securities" - so why bother? Instead, just invest in an asset that mimics the index - that is, an index fund. This will do as well as the "market" with much lower expenses that those associated with "active" asset management.

The dollar has depreciated against foreign currencies. The likely result is a(n): I increasing trade surplus II decreasing trade surplus III increasing trade deficit IV decreasing trade deficit A. I and III B. I and IV C. II and III D. II and IV

B. I and IV If the dollar depreciates, U.S. goods become cheaper to foreigners and foreign goods become more expensive in the U.S. Thus, we are likely to export more, increasing any trade surpluses or decreasing any trade deficits.

An older customer, age 63, that is in the lowest tax bracket, seeks an investment that will give him an income stream. The BEST recommendation would be: A. Variable annuity B. Municipal bond C. Certificate of deposit D. AAA Corporate bond

B. Municipal bond Because the customer is in a low tax bracket, you would not recommend the municipal bond. Most variable annuity separate accounts are invested in equities for growth to supplement other forms of retirement income. Because they are equity funds, they do not give much of an income stream. The CD and the AAA Corporate bond both provide income, which is the stated objective. However, the AAA corporate bond is top-rated and will give a higher income stream than a CD. This is the best choice. Note that the question tells us nothing about risk tolerance, which would certainly be helpful, but this is typical of "test-like" questions!

A foreign currency trade that settles on a mutually agreed date after trade date is a: A. cash settlement B. seller's option settlement C. forward settlement D. spot settlement

C. forward settlement Settlement of "forward" trades in the Interbank market takes place on a mutually agreed date in the future. This contrasts with "spot" settlement of foreign currency trades which occurs either one or two business days after trade date (the more actively traded currencies settle next day; less actively traded currencies settle in 2 business days).

The Capital Asset Pricing Model (CAPM) would identify the most efficient investments as those with the: A. lowest return for the lowest level of risk assumed B. lowest return for the highest level of risk assumed C. highest return for the lowest level of risk assumed D. highest return for the highest level of risk assumed

C. highest return for the lowest level of risk assumed CAPM is a methodology for finding the most efficient investments - those that give the greatest return for the amount of risk assumed. The model identifies the most efficient investments as those that give a rate of return equal to the "risk-free" rate of return (the rate of return for investments only having systematic risk) plus a premium for any non-systematic risk inherent in the investment.

The target allocation for a specific asset class has been set at 20% of total assets under an asset allocation scheme. The manager is permitted to reduce this percentage to 15%; and can increase it to 25%; as he or she sees fit. If this action is taken by the manager, this is termed: A. portfolio rebalancing B. strategic asset management C. tactical asset management D. active asset management

C. tactical asset management The selection of the percentage of total assets to be allocated to a given asset class is called "strategic asset management" - that is, setting the investment strategy. The permitted variation from this percentage that is given to the asset manager, so that the manager can take advantage of market opportunities, is called "tactical asset management".

Which of the following securities is NOT directly interest rate sensitive? A. Utility Stocks B. Corporate Bonds C. Preferred Stocks D. Growth Stocks

D. Growth Stocks Utility stocks are directly interest rate sensitive since utilities have an extremely large portion of their capitalization as debt. If interest rates rise, as the utilities refund maturing debt, their interest costs increase, depressing earnings and therefore the stock price. Preferred stocks and bonds are directly interest rate sensitive because they pay a fixed dividend or interest rate. If interest rates rise, their prices must fall to provide comparable market yields; and vice-versa. Common stocks and growth stocks are priced primarily on future expectations of earnings for these companies. They are not directly interest rate sensitive.

Which of the following formations are bearish? I Saucer II Head and Shoulders III Inverted Saucer IV Inverted Head and Shoulders A. I and II B. III and IV C. I and IV D. II and III

D. II and III Both an inverted saucer formation, and a head and shoulders top formation show a market that is "topping out" and hence are bearish. A saucer formation, and an inverted head and shoulders formation, show a market that is bottoming out, and hence are bullish.

The "Efficient Market Theory" states that: I undervalued securities should exist II undervalued securities should not exist III overvalued securities should exist IV overvalued securities should not exist A. I and III B. I and IV C. II and III D. II and IV

D. II and IV The "Efficient Market" Theory holds that prices of securities in the market fully reflect all publicly available information, so that undervalued or overvalued securities should not exist. Thus, securities selection based on any type of analytical method is irrelevant. In reality, most individuals believe that the market is only "partly" efficient in pricing securities - so that undervalued and overvalued securities will always exist. These could be identified by both fundamental and/or technical analysis.

Value investing

The selection of equity investments based on finding undervalued issues using fundamental analysis.

Cyclical stock

the common stock of companies whose market value and performance changes directly with the phases of the business cycle. Examples include companies that produce durable goods or that are involved in building homes.

Counter-cyclical stock

the common stock of companies whose market value and performance move opposite to the phases of the business cycle. Companies that produce basic food products are counter-cyclical because when peoples' income declines, they eat out less and eat in more.

Strategic asset allocation

the determination of the percentage of assets to be placed in each asset class under an asset allocation scheme.


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