2008 CFA Level 1 － Sample 样题(1)－Q44 style, black, class

8586

44、Bharath Advanced Technologies, Inc., is a large firm in a competitive industry. The company has above-average investment opportunities and its return on investments has been above the required rate of return. In addition, Bharath has invested heavily in fixed assets and technology to reduce its production costs. The company has also increased its advertising budget substantially to establish a strong brand image for its products. From the above description, Bharath is best characterized as a:

A. cyclical company that follows a low-cost strategy.

B. speculative company that follows a differentiation strategy.

C. growth company that follows a defensive competitive strategy.

D. defensive company that follows an offensive competitive strategy.

      

[此贴子已经被作者于2008-11-7 15:30:38编辑过]

8586

Correct answer = C

"Company Analysis and Stock Valuation," Frank K. Reilly and Keith C. Brown
2008 Modular Level I, Vol. 5, pp. 150-152
Study Session 14-59-a
differentiate between 1) a growth company and a growth stock, 2) a defensive company and a defensive stock, 3) a cyclical company and a cyclical stock, 4) a speculative company and a speculative stock, and 5) a value stock and a growth stock
A growth company is a firm with the management ability and the opportunities to make investments that yield rates of return greater than the firm's required rate of return. A company following a defensive competitive strategy attempts to position itself to deflect the effect of the competitive forces in the industry. Examples may include investment in fixed assets and technology to reduce its production costs or increasing advertising budgets to establish a strong brand image for products. 

 

 

[此贴子已经被作者于2008-5-19 16:47:21编辑过]

louzhuqued

t

zhangxie83

a

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c

smalldong

c

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[em02]

Riverview

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gening

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