FREE Financial Advisor Series 65 Question and Answers
The balance statement of a firm contains all of the information below, EXCEPT for:
The balance sheet of a business reveals the worth of that business's assets and liabilities. According to the balance sheet equation, a company's total assets will equal its liabilities plus owner equity. Additionally, a company's "net worth" can be determined by looking at its owner equity. To tell an analyst if a firm is generally on an upward trend of improvement or a downward trend of deterioration, the balance sheet, which only offers a snapshot of a company's value at one moment in time, is not a very useful tool.
All of the information about a stock's pricing patterns and trendlines is accurate, EXCEPT for:
Given that the historical pattern reveals the stock price has already "bottomed out," a head and shoulders bottom predicts that the future trend of the stock price will be higher (NOT downward). The trendline will connect all of the stock's price pattern bottoms over a period of rising prices. The validity of a stock's trendline depends on how many times the price pattern crosses it; the larger the number, the higher the level of validity.
The following are all illustrations of systematic risk, EXCEPT:
Regardless of a company's specific current state or performance, systemic risk is related to the market as a whole and changes within it that have a negative impact on it. Examples of this sort of risk include market risk, purchasing power risk, and interest rate risk (the risk of changes in interest rates) (the risk of an overall market decline due to an event outside of individual companies and their performance). Financial risk is NOT a systematic risk; rather, it is an unsystematic risk because it solely pertains to a certain sector of the economy or organization. It has to do with a company's debt financing and continued capacity to pay its debts.
Except for: All of the following describe a business cycle trough.
Given that a business cycle trough is defined as the END of a declining pattern of economic activity, it would consequently be characterized by a favorable outlook for future growth in consumer spending, a gradual shift in the growth rate of the Gross Domestic Product (GDP), and a moderate rate of inflation.
Which of the following factors will determine and have an impact on the interest rate a borrower pays?
The interest rate that a borrower will be required to pay is decided and impacted by the anticipated rate of inflation, the borrower's creditworthiness, and the term of the loan.
Which of the following central tendency measures is described as determining the value that is found most frequently in a particular distribution of numbers?
The mode is a measure of central tendency that is defined as the value that is most frequently found in a particular distribution of numbers. The mean, sometimes referred to as the average, is determined by adding up all the values and dividing by the total number of values. The computed difference between a distribution's high and low values is known as the range, and the value that sits in the middle of the distribution is known as the median.
The "FED" (Federal Reserve Board) uses all of the above to affect the US economy, and more especially, the money supply, EXCEPT:
The Federal Reserve Board (FED) uses each of the aforementioned instruments to affect the American economy, and more especially, the money supply, with the exception of setting the prime rate. The bigger commercial banks choose that rate. The amount of money that commercial banks must deposit with the FED is determined by the reserve requirements for commercial banks, which are raised or lowered in response to changes in the discount rate. Additionally, buying and selling U.S. Treasury securities on the open market has a direct impact on the money supply by increasing the reserves of commercial banks from which the purchases were made and decreasing bank reserves when securities are sold.