Quiz II Review CFM II

Which of the following best characterizes an economic cycle?

• The economy will continue on an upwards trend

• The natural progression of growth and retraction that occurs in the market

• The tendency for economies to copy one another in order to become the strongest

• The concept that all companies will even out over time

Which of the following is NOT a reason a company would expand to a foreign market?

• growth

• new products / services

• to provide new services to existing (current) clients

• expand sales for existing products

What is Dollar Cost Averaging?

• You invest the same amount over a given time period to avoid mistiming the market.

• You are able to change past investments to "average" the purchase price with a new investment.

• Your investment is adjusted for inflation.

• Maximizes your short-term return on investments.

A Beta risk level score of less than 1 indicates that the investment is:

• More volatile than the market

• Less volatile than the market

• Adjusted for inflation

• Maximizing short-term return on investments

A Beta risk level score of greater than 1 indicates that the investment is:

• More volatile than the market

• Less volatile than the market

• Adjusted for inflation

• Maximizing short-term return on investments

Match the description that best fits each term: Quick, short-term, returns based on fluctuations in price.

• Trading

• Investing

• Both Trading and Investing

• Neither Trading nor Investing

Match the description that best fits each term: Long term strategy to grow asset value through market cycles.

• Trading

• Investing

• Both Trading and Investing

• Neither Trading nor Investing

Earnings per share (EPS) is used for all of the following EXCEPT:

• Used to compare companies rather than looking at stock price.

• Estimates corporate value by comparing how much is made against the number of shares outstanding (that exist)

• Used as a gauge for investors to find value if they believe profit is higher relative to price.

• Dictates dividend payment.

Which investment type functions similar to a stock in that you have to buy and sell shares to realize gains?

• Mutual Funds

• ETFs

• Both

• Neither

Which investment type can be pegged (mirror) an index as an investment strategy?

• Mutual Funds

• ETFs

• Both

• Neither