Question

15. _______

Using the Dividend Discount Model, answer the following question: Aardvark, Inc. pays a constant

annual dividend. At the end of trading on Wednesday, the price of its stock was $28. At the end of

trading on the following day, the stock price was $27. As a result of the decline in the stock's price, the

dividend yield _____ while the capital gains yield _____.

A. decreased; decreased

B. remained constant; remained constant

C. decreased; remained constant

D. increased; remained constant

E. increased; increased

16. _______

Which one of the following terms is most commonly used for the annual amount by which the

government spending exceeds government revenues?

A. National debt.

B. Inflation.

C. Total expenditures.

D. Insufficient funds.

E. Budget deficit.

17. _______

Who is most responsible for creating fiscal and monetary policy?

A. The Judicial and Legislative Branches of government are most responsible for monetary policy and

the Board of Governors of the Federal Reserve System is most responsible for the fiscal policy.

B. The Judicial and Executive Branches of government are most responsible for monetary policy and the

Board of Governors of the Federal Reserve System is most responsible for the fiscal policy.

C. The Legislative and Executive Branches of government are most responsible for monetary policy and

the Board of Governors of the Federal Reserve System is most responsible for the fiscal policy.

D. The Legislative and Executive Branches of government are most responsible for fiscal policy and the

Board of Governors of the Federal Reserve System is most responsible for the monetary policy.

E. The Judicial and Executive Branches of government are most responsible for fiscal policy and the

Board of Governors of the Federal Reserve System is most responsible for the monetary

18. _______

Investors are most likely to shift their portfolio towards which of the following sectors during a

recession?

A. Industrials.

B. Energy.

C. Consumer Staples.

D. Basic Materials.

E. Consumer Discretionary.

19. _______

Which of the following is NOT an example of a cryptocurrency?

A. Bitcoin

B. Etherium

C. Blockchain

D. Ripple

E. Litecoin

20. _______

Which of the following is NOT one of the macro variables that analysts keep track of when analyzing

the overall US economy?

A. GDP

B. Interest rates

C. Inflation

D. Unemployment rate

E. All of the above answers are used to track the US economy

21. _______

Which of the following is not used to determine the value of a stock?

A. Dividend discount model

B. Discounted cash flow model

C. Relative valuation models using firm multiples

D. Fisher model

E. All of the above models are used to value a stock

Answer 1

Q.15) d) increased and remained constant

Q. 16) Answer is e) Budget deficit as it is referred to the situation when an individual, business or government budgets more spending than there is revenue available.

Q. 17) d) in US Fiscal policy is directed by both the executive and legislative branches of the government and board of governors of the federal reserve system is most responsible for the monetary policy.

Q. 18) d) basic materials

Q. 19) E) LITECOIN

Litecoin is based on an open source global payment network that is not controlled by any central authority. Litecoin differs from bitcoins in aspects like faster block generation rate and use of scrypt as a proof of work scheme.

Q.20) b) interest rate

Q.21) d) Fisher model