Question
1.What are the three types of economic indicators? accelerating, decelerating, push underweight, overweight, marketweight growth, neutral, decline leading, coincident, lagging 2.What is the normal shape
1.What are the three types of economic indicators?
accelerating, decelerating, push
underweight, overweight, marketweight
growth, neutral, decline
leading, coincident, lagging
2.What is the "normal" shape of the yield curve?
upward sloping
bell shaped
"W" shaped
there is no normal shape
3.A downward sloping yield curve is thought to be indicative of what?
durable goods orders will rise
house prices will fall
a recession may be near
stock prices are about to increase
4.The risk premium for BBB bonds is considered to be very high: what is this a signal that you should do with equities?
sell them
buy them
hedge them
trick question, bond premia have nothing to do with equities and cannot be used when considering equities
5.Use consensus EPS of the S&P 500 of $160/share, growth of 4%, current book value per share of $945 to estimate the fair value of the S&P 500 index.The cost of equity is 6%.
3500
5740
6820
6110
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