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