1. One may describe the information ratio as follows:
    1. It measures risk adjusted performance of a manager using beta as the adjustment for risk.
    2. It is used to ascertain the ability of an investment manager to add risk-adjusted return.
    3. It is designed to measure a manager's performance adjusted for total risk.
    4. Either a or c.
  2. An investor's purchase of municipal bonds would be prudent when:
    1. The investor seeks tax-free income.
    2. The investor's marginal tax rate is high.
    3. The investor is looking to avoid the intangibles tax.
    4. The investor wants to increase income.
  3. Contrarian indicators include all of the following, except:
    1. CBOE Put/Call Ratio.
    2. Odd Lot Short Sales Theory.
    3. Mutual fund cash position.
    4. Relative strength.
  4. Challenges to technical analysis exclude all of the following, except:
    1. Pure expectations hypothesis.
    2. The Laffer Curve.
    3. Supply side economics.
    4. The Efficient Market Hypothesis (EMH).
  5. Profitability Ratios include all of the following, except:
    1. Dividend payout ratio.
    2. Inventory turnover.
    3. Return on equity.
    4. Return on assets.
  6. Elements of fiscal policy designed to tighten money supply exclude all of the following, except:
    1. Purchase government securities.
    2. Raise taxes.
    3. Increase deficit spending.
    4. Raise the discount rate.


Review Answers

Related Articles
  1. Investing

    Ratio Analysis

    Ratio analysis is the use of quantitative analysis of financial information in a company’s financial statements. The analysis is done by comparing line items in a company’s financial ...
  2. Investing

    Efficient Market Hypothesis: Is The Stock Market Efficient?

    Deciding whether it's possible to attain above-average returns requires an understanding of EMH.
  3. Taxes

    Understanding the Laffer Curve

    The Laffer Curve is a graph that shows how changes in tax rates can influence economic growth.
  4. Taxes

    How Your Tax Rate Is Determined

    Feel like the government always has its hand in your pocket? Learn the theory behind how it decides how much to take.
  5. Investing

    Efficiency Ratio

    There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ...
  6. Investing

    Analyze Investments Quickly With Ratios

    Make informed decisions about your investments with these easy equations.
  7. Investing

    Key Financial Ratios for Retail Companies

    Using the following liquidity, profitability and debt ratios, an investor can gather deeper knowledge of a retail company's short-term and long-term outlook.
  8. Insights

    What Is Market Efficiency?

    The efficient market hypothesis (EMH) suggests that stock prices fully reflect all available information in the market. Is this possible?
  9. Investing

    Explaining Financial Analysis

    Financial analysis is a general term that refers to using financial data to make business and investment decisions.
  10. Investing

    Payout Ratio vs. Retention Ratio: When to Use Which

    The payback ratio and retention ratio collect different information and are useful in different situations.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center