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Reading 58: Equity: Concepts and Techniques - LOS e, (Part

1.Regarding risk in global industry analysis, returns-based measures such as total risk and covariance risk are important in assessing which one of the following elements?

A)   Competition along the value chain.

B)   Government policies.

C)   Competition in markets.

D)   Market risk factors.

2.Regarding a global industry analysis, which of the following is NOT an element related to risk?

A)   Competition for distribution channels.

B)   Competition along the value chain.

C)   Governmental policies.

D)   Competition in markets.

3.Regarding risk in global industry analysis, the relation of price to average cost is important in assessing which of the following elements?

A)   Competition along the value chain.

B)   Government policies.

C)   Market risk factors.

D)   Competition in markets.

答案和详解如下:

1.Regarding risk in global industry analysis, returns-based measures such as total risk and covariance risk are important in assessing which one of the following elements?

A)   Competition along the value chain.

B)   Government policies.

C)   Competition in markets.

D)   Market risk factors.

The correct answer was D)

Returns-based measures such as total risk and covariance risk (or market risk) may provide information about market risk factors that are important elements of risk in a global industry analysis.

2.Regarding a global industry analysis, which of the following is NOT an element related to risk?

A)   Competition for distribution channels.

B)   Competition along the value chain.

C)   Governmental policies.

D)   Competition in markets.

The correct answer was A)

The elements related to risk in global industry analysis include: competition in markets, competition along the value chain, governmental policies and market risk factors. Competition for distribution channels is not considered to be one of the elements.

3.Regarding risk in global industry analysis, the relation of price to average cost is important in assessing which of the following elements?

A)   Competition along the value chain.

B)   Government policies.

C)   Market risk factors.

D)   Competition in markets.

The correct answer was D)

The relation of price to average cost may provide information about competitive strategies followed by firms in an industry.

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