Devry FIN 351 Week 2 Quiz
Question 1
3 pts
(TCO 2) Investors find that economic analysis is important because they need to anticipate _____.
- changes in corporate profits due to business cycle impacts
- growth in various industry segments based on changing economic trends
- how foreign trade might affect U.S. companies
- All of the above
Question 2
3 pts
(TCO 2) Of the predictors of economic patterns and stock market movements, the best is the _____.
- money supply
- level of interest rates
- 10 leading indicators
- No one variable is best; as many as possible should be considered.
Question 3
3 pts
(TCO 2) The proper order of the industry life cycle is _____.
- development, growth, expansion, maturity, and decline
- expansion, growth, development, maturity, and decline
- development, expansion, growth, maturity, and decline
- expansion, development, growth, maturity, and decline
Question 4
3 pts
(TCO 2) The crossover point on the life cycle curve is the point where _____.
- the company issues stock in an initial public offering (IPO)
- the company gets listed on an organized exchange
- the company’s industry moves from the growth stage to the expansion stage
- the industry’s products begin to be accepted by the marketplace
Question 5
3 pts
(TCO 2) The purpose of stock valuation is _____.
- to set the fair market price for a given common stock
- to determine whether the common stock’s value is fairly represented by its market price
- of limited value, since the efficient market hypothesis proves that all common stock is always fairly priced
- to find common stocks whose market price equals the intrinsic value
Wait.... Hire Me To Get 100% Original Help In . With No Upfront Fees. Watch The Video Below For More Information & How It Works!
Question 6
3 pts
(TCO 2) The primary difference between dividend valuation models and earnings valuation models is _____.
- selecting the appropriate discount rate
- dividends are not considered in earnings models
- whether the investor’s income stream or the firm’s income stream is measured
- More than one of the above
Question 7
3 pts
(TCO 2) Which of the following would most likely affect the P/E ratio of the market in general?
- A significant change in government fiscal policy is likely to affect the P/E ratio.
- Declining earnings of the S&P 500 companies are likely to affect the P/E ratio.
- Investors’ expectations about inflation changes and becomes either more positive or more negative.
- All of the above
Question 8
3 pts
(TCO 2) The statement of cash inflows and outflows shows all of the following, except _____.
- how the firm’s balance sheet changed from one period to another
- how funds from operations were used to finance the company’s assets
- how the firm has matched short-term and long-term sources of funds with short-term and long-term uses of funds
- the firm’s cost of new borrowing
Question 9
3 pts
(TCO 2) The primary purpose of the liquidity ratios is to determine _____.
- how much working capital is tied up in inventory
- the relative level of short-term debt
- how well a firm is able to pay off short-term obligations
- More than one of the above
Question 10
3 pts
(TCO 2) _____ ratios measure the impact of external market forces on the internal performance of a firm.
- Price
- Profitability
- Liquidity
- Asset-utilization
