QUESTION 1

Coincidental indicators are affirmative indicators. True or False?

1. True
2. False

QUESTION 2

When is the bursting of a bubble more likely to have serious macroeconomic consequences?

1. When the unemployment rate is high, as a subsequent bursting of the bubble will lead to even higher unemployment rates and lower spending
2. When the US yield curve is flat and showing signs of inversion, and the Federal Reserve embarks on tapering
3. When inflation is high, interest rates are rising and lending standards are tightened considerably, resulting in a credit crunch
4. When households and firms take advantage of rising assets prices and cheap credit to finance a lot of consumption/investment that would otherwise not be possible

QUESTION 3

As the economy continues to grow and enters a mid-to-late cycle, investors want to be assured that there is sufficient momentum to sustain the growth. They can get this from _________?

1. Lagging indicators
2. Affirmative indicators
3. Coincidental indicators
4. Leading indicators

QUESTION 4

Is the following statement true or false?

The interaction of macroeconomic imbalances, investor leverage, extreme valuations and higher financing costs do not trigger multi-sigma corrections on their own but macroeconomic policy or policy surprise usually drive multi-sigma corrections in expensive markets as expectations on growth and/or liquidity reset lower.

1. True
2. False

QUESTION 5

Which of the following is the correct investment strategy employed during the LATE cycle?

1. Consumer discretionary, financials, real estate
2. Consumer staples, utilities, high dividend stocks, high grade bonds, longer-duration
3. Technology, high yield bonds, growth stocks
4. Commodities, mid-to-short duration

QUESTION 6

When the economy is in the early stages of a recovery, investors need __________ indicators to tell them how the economy is actually doing.

1. Leading
2. Coincidental
3. Affirmative
4. Lagging

QUESTION 7

Lagging indicators are descriptive indicators. True or False?

1. True
2. False

QUESTION 8

Which of the following is the correct investment strategy employed during the EARLY cycle?

1. Consumer staples, utilities, high dividend stocks, high grade bonds, longer-duration
2. Technology, high yield bonds, growth stocks
3. Commodities, mid-to-short duration
4. Consumer discretionary, financials, real estate

QUESTION 9

In a bubble, extreme valuations begin appearing ________.

1. ....only in the following business cycle as extreme valuatiuons in bubbles take a long time to build
2. ...a few years into an expansion rather than immediately following the previous recession
3. ...when the Federal Reserve starts quantitative easing, as the sheer amount of liquidity pumped into the system manifests itself in some risk assets
4. ...immediately after the previous recession, bulidng upon the already lofty valuations then

QUESTION 10

What is the correct order of the following cycles

1. The Liquidity cycle leads the Business cycle which in turn leads the Investment cycle
2. The Investment cycle leads the Business cycle which in turn leads the Policy Rate cycle
3. The Business cycle leads the Investment cycle which in turn leads the Policy Rate cycle
4. The Policy Rate cycle leads all other cycles, hence the Federal Reserve's premptive rate cut/hike decisions