Stock & Bond Test 1

Top-down approach to Security Analysis includes all of the following except:

• Economic analysis

• Technical Analysis

• Functional Analysis

• Fundamental Analysis

Which analysis method is primarily concerned with historical price patterns and trends?

• Technical Analysis
• Quantitative Analysis
• Sentiment Analysis
• Fundamental Analysis

GDP can be measured two ways, one method is the income approach and the other is

• market value approach
• cost approach
• expenditure approach
• production approach

Ture/False

Because all firms in an industry do not move together there is little value in industry analysis.

• True

• False

How does inflation affect the stock market?

• Inflation leads to increased stock prices due to higher consumer spending.
• Inflation has no impact on the stock market performance.
• Inflation generally has a negative effect on the stock market due to higher interest rates and reduced consumer spending.
• Inflation causes stock prices to stabilize and remain unchanged.

Economic indicators during a recession/ contraction include which of the following?

• Higher consumer confidence
• Increasing wages
• Rising stock market
• Rising unemployment, declining GDP, decreased consumer spending, lower industrial production.

Product lifecycle includes:

• Debut, Surge, Stability, Fade
• Start, Rise, Plateau, Fall
• Introduction, Growth, Maturity, Decline
• Launch, Expansion, Peak, Withdrawal

Which industry stage is characterized by a reduction of the growth rate in the economy usually less than the rate of the overall economy.

• Startup stage
• Maturity stage
• Decline stage
• Growth stage

A resistance level is the price range at which the technician would expect an increase in the demand of

stock and a price reversal

• True

• False

Answer explanation

A resistance level is a price point or range at which a stock tends to face selling pressure, not increased demand. It’s where technicians expect the price to struggle to rise further, often leading to a price reversal or pullback. T

Which of the following is an underlying assumption of the constant growth dividend discount model

(DDM)?

• The constant growth rate of dividends will continue for an infinite time period

• Dividends have a constant growth rate

• The required rate of return is greater than the expected growth rate

• All of the above