Series 65 – Uniform Investment Adviser Law Exam Economic Factors and Business Information 3

Question 1

What is the difference between a balance sheet and an income statement?

Accepted Answer

A balance sheet shows assets, liabilities, and equity at a point in time; an income statement shows revenues and expenses over a period

Answer

They are the same document

Answer

A balance sheet shows revenues; an income statement shows assets

Answer

A balance sheet covers annual data; an income statement covers quarterly data only

Question 2

Which of the following is considered a lagging economic indicator?

Accepted Answer

The unemployment rate

Answer

Stock prices

Answer

New orders for consumer goods

Answer

Building permits

Question 3

What does the term 'beta' measure for a security?

Accepted Answer

A security's volatility relative to the overall market

Answer

A security's yield relative to its price

Answer

A security's credit quality

Answer

A security's dividend growth rate

Question 4

What is the primary purpose of the money supply (M1, M2) measurement?

Accepted Answer

To measure the total amount of money available in the economy

Answer

To track stock market growth

Answer

To calculate tax revenues

Answer

To measure corporate profitability

Question 5

Which of the following best describes 'stagflation'?

Accepted Answer

High inflation combined with slow economic growth and high unemployment

Answer

Rapid economic growth with low inflation

Answer

Deflation accompanied by high unemployment

Answer

Stable prices with moderate economic growth

Question 6

What does a company's debt-to-equity ratio indicate?

Accepted Answer

The proportion of a company's financing from debt relative to equity

Answer

The proportion of a company's assets financed by shareholders versus creditors

Answer

A company's total revenue relative to its market cap

Answer

A company's dividend yield