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LOS v: Discuss the security selection process and differentiate between top-down and bottom-up approaches to equity research.
Q1. An investment management firm is preparing to hire an independent analyst to recommend security selections for the firm’s portfolio. The firm would like to keep the manager’s compensation straightforward and predictable. Which of the following best describes the firm’s situation? The investment management firm wants to hire a:
A) buy-side analyst and pay them performance-based fees.
B) sell-side analyst and pay them on ad valorem basis.
C) buy-side analyst and pay them on ad valorem basis.
Q2. Which of the following best describes the buy-side equity research approach?
A) Investment recommendations are used to promote stocks and the research is available to the public.
B) Investment recommendations are presented to a committee and the research is available to the public.
C) Investment recommendations are presented to a committee and the research is not available to the public.
Q3. Jane Andrews has investigated the economic conditions in the country of Semeria and is forecasting an economic expansion. She then investigates the valuations for cyclical stocks in this country. What equity research approach is she using?
A) A combination of top-down and bottom-up.
B) Bottom-up.
C) Top-down.
Q4. Which of the following would least likely be included in bottom-up equity research?
A) Currency forecasts.
B) Price-multiple.
C) Dividend yield. | 
发表于 2009-3-9 09:43
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