ch14 - Chapter 14 INDUSTRY ANALYSIS Multiple Choice...

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Chapter 14 INDUSTRY ANALYSIS Multiple Choice Questions Overview 1. In fundamental analysis, industry analysis is the: a. first step. b. second step. c. third step. d. fourth step. (b, easy) What Is An Industry? 2. Standard & Poor's new Global Industry Classification system divides everything into _________economic sectors. a. 10 b. 20 c. 30 d. 40 (a, easy) 3. Standard and Poor's new Global Industry Classification System already includes _______ companies. a. 10,000 b. 25,000 c. 50,000 d. 75,000 (b. moderate) Chapter Fourteen Industry Analysis 176
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4. A well-known and widely used system that classified industries for more than 60 years was the: a. Commercial Industrial Classification system. b. National Industrial Classification system. c. Standard Industrial Classification system. d. American Industrial Classification system. (c, easy) 5. Which of the following covers approximately 1,700 companies, divided into 96 industries? a. SIC b. NAICS c. GICS d. Value Line Investment Survey (d, moderate) The Importance of Sector/Industry Analysis 6. Industry analysis is important because: a. companies can only do as well as their industry. b. industries often have an inverse relationship to the market. c. industries perform very differently over time. d. companies in declining industries lose money. (c, moderate) 7. If an industry is ranked number one, based on price performance such as the S&P Industry Stock Indexes, an investor a. cannot necessarily expect that same industry to be ranked number one again next year. b. can usually depend on an industry to maintain its top ranking for five years or more. c. can expect that industry to do well over the next 10 to 20 years. d. can expect that industry to drop out of the top ten within five years. (a, moderate) Chapter Fourteen Industry Analysis 177
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Analyzing Sectors/Industries 8. Which life cycle stage generally sees industries improving their products, lowering prices, and start to attract considerable investment funds? a. pioneering stage b. expansion stage c. stabilization stage d. maturity stage (b, moderate) 9. Weaker firms typically fail the most in the: a. pioneering stage. b. expansion stage. c. stabilization stage. d. maturity stage. (a, moderate) 10. Which of the following is not one of the stages of the industry life cycle? a. introductory b. declining c. stabilization d. pioneering (a, easy) 11. The basic competitive factors facing industries include all of the following except: a. bargaining power of suppliers b. threat of government regulation c. rivalry between existing competitors d. threat of substitute products (b, difficult) Chapter Fourteen Industry Analysis 178
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12. Which of the following is limitation of the life cycle approach to security analysis?
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This note was uploaded on 08/29/2009 for the course BUS Invt taught by Professor Yost during the Spring '09 term at W. Florida.

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ch14 - Chapter 14 INDUSTRY ANALYSIS Multiple Choice...

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