Reference no: EM133275391

1. All else equal, the _____ the required return rate the ____ it's justified P/E

Select one:

a. lower; lower
b.lower; higher
c. higher; higher

2. Industries with low barriers to entry have

Select one:

a. low pricing power
b. underutilized capacity
c. high pricing power

3. Which of the following correctly describes the relationship between arithmetic, geometric and harmonic mean?

Select one:

a. harmonic < geometric < arithmetic
b. harmonic < arithMetic < geometric
C. arithmetic.< geometric < harmonic

4. What type of investing style is most likely starts with changes in inventory?

Select one:

a. bottom down
b. bottom up
c. top down

5. Which of the following industries is most likely to face the threat of entry?

Select one:

a.financial services
b food services
C. telecommunications services

6. What is the preferred method to forecast a firm's cost of goods sold (COGS)?

Select one:

a. as a percentage of expected sales
b. from historical growth rates
c.as a fixed number based on historical sales

7. Which of the following is the primary concern with using P/B ratios?

Select one:

a. book values are not strong predictors of future cash flows
b. book values are dependent on accounting conventions which may not reflect market values
c.book values are equal to market values in most instances so there is little value gained from this measure

8. The P/S ratio has which of the following weaknesses as compared to the EVIS ratio?

Select one:

a. fails to deal with leverage properly
b.fails to recognize revenue recognition problems
C.fails to deal with cyclical firms properly

9. Which of the following industries is least affected by technological innovation?

Select one:

a. pharmaceuticals
b.oil services
C.confections and candy

10. During this phase of the industry life cycle, demand approaches market saturation levels.

Select one:

a.mature
b. shakeout
c.decline