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

Question 1

Which economic indicator is considered a leading indicator of future economic activity?

Accepted Answer

Building permits

Answer

Unemployment rate

Answer

GDP

Answer

Consumer price index

Question 2

When the Federal Reserve raises the federal funds rate, what is the typical effect on bond prices?

Accepted Answer

Bond prices fall

Answer

Bond prices rise

Answer

Bond prices are unaffected

Answer

Bond prices become more volatile

Question 3

Which phase of the business cycle is characterized by rising GDP, falling unemployment, and increasing consumer spending?

Accepted Answer

Expansion

Answer

Contraction

Answer

Trough

Answer

Peak

Question 4

What does a yield curve inversion typically signal?

Accepted Answer

A potential recession

Answer

Strong economic growth ahead

Answer

Rising inflation

Answer

Federal Reserve rate cuts

Question 5

Which of the following best describes the Consumer Price Index (CPI)?

Accepted Answer

A measure of changes in the price of a basket of consumer goods and services

Answer

A measure of stock market performance

Answer

A measure of corporate earnings growth

Answer

A measure of unemployment trends

Question 6

What is the formula for calculating a company's price-to-earnings (P/E) ratio?

Accepted Answer

Market price per share divided by earnings per share

Answer

Earnings per share divided by market price

Answer

Net income divided by total assets

Answer

Total revenue divided by net income