1.Which combination of business cycle stage and related attractive investment is least appropriate? < >>
| Stage of the business cycle
| Investment |
A) Recovery Commodities B) Late cycle recession Bonds C) Early upswing Real estate D) Economy slows Interest-sensitive stocks The correct answer was B) Late in a recession, appropriate investments would be stocks and commodities, in preparation for the economic upswing. Bonds would not be appropriate since interest rates would likely rise as the economy picks up. 2.Which description of analysts’ attempts to forecast economic growth is most accurate? A) Long-run forecasts focus on predicting turning points in the business cycle. B) Business cycle forecasts are important because they provide a high degree of accuracy in predicting which sectors will outperform. C) Expected real economic growth is the most important variable to analyze in a country because it is the one that can be predicted most accurately. D) Analysts who can identify the various stages of the business cycle better than others have the opportunity to earn excess risk-adjusted returns. The correct answer was D) Long-run forecasts focus on predicting long-run growth. Short-run forecasts focus on the business cycle, even though they are difficult to make with any degree of success. Economic growth is the most important variable to analyze because it has the most impact on risk and return, even though it is difficult to forecast. 3.Which combination of business cycle stage and related attractive investment is least appropriate? < >>
| Stage of the business cycle | Investment |
A) Early upswing Equities B) Recovery Interest-sensitive stocks C) Late upswing Bonds D) Economy slows Bonds The correct answer was B) In a recovery, appropriate investments would be stocks and commodities, in response to the economic upswing. Interest-sensitive investments would not be appropriate since interest rates would likely rise as the economy picks up. | 
发表于 2008-5-13 15:13
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