Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Series 7 by Chapter > Fundamental and Technical Analysis > Flashcards

Fundamental and Technical Analysis Flashcards

1
Q
A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Is the Dow Jones Industrial Average considered broad or narrow?

A

Broad

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How would the issuance of stock affect a company’s balance sheet?

A

1) Current assets (cash) is increased and 2) Shareholder’s Equity is increased (Working capital is increased)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Identify the following formula: Total Assets = Total Liabilities + Shareholder’s Equity

A

Balance Sheet Equation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What ratio tests a company’s ability to pay its current liabilities with its current assets, but excludes inventory?

A

The Quick Asset Ratio (the Acid Test)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q
A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

An increase in odd lot buying is a _________ indicator.

A

An increase in odd lot buying is a bearish indicator.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Identify the following formula: Annual dividend ÷ EPS

A

Dividend payout ratio

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The breakout of an area of resistance is a __________ indicator.

A

The breakout of an area of resistance is a bullish indicator.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

True or False: Fundamental analysis focuses on analyzing the market using charts, patterns, trends, and short interest.

A

False. Charts, trends, pattern analysis, and theories would be the focus of a technical analyst.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

True or False: The head and shoulders patterns are indicative of the reversal of a trend.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q
A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

____________ level is the price level at which point a stock stops increasing.

A

Resistance level is the price level at which point a stock stops increasing.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

True or False: According to CAPM, a security’s return equals a risk-free return (T-Bill return) plus a risk premium.

A

True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How is cash flow calculated?

A

Net income plus depreciation. Depreciation is added back, since it is a non-cash expense.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

True or False: The Efficient Market Theory indicates that, through analysis, undervalued situations can be discovered.

A

False

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The _________ Theory states that small public investors are generally wrong.

A

The Odd Lot Theory states that small public investors are generally wrong.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

To find a stock’s current yield, the formula is: ____________ ÷ ____________

A

To find a stock’s current yield, the formula is: Annual Dividend ÷ Current Market Price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

If given a stock’s P/E ratio and market price from a stock table, how is EPS calculated?

A

Market price ÷ P/E ratio

20
Q

True or False: The Wilshire Associates Index is considered the broadest of the broad-based indexes.

A

True

21
Q

Working Capital, Current Ratio, and the Quick Asset Ratio (Acid Test) are examples of ____________ ratios.

A

Working Capital, Current Ratio, and the Quick Asset Ratio (Acid Test) are examples of liquidity ratios.

22
Q

What theory states that all known relevant information is reflected in a security’s price?

A

Efficient Market Theory (also called the Random Walk Theory)

23
Q

What theory analyzes the amount of a company’s stock that has been shorted and not yet covered?

A

Short Interest Theory

24
Q

A large short interest is a __________ indicator.

A

A large short interest is a bullish indicator.

25
Q

Is the head and shoulders top formation the reversal of an upward or downward trend?

A

Upward

26
Q

What is the beta of the market (S and P 500)?

A

1

27
Q

____________ ÷ ____________ = Current Ratio

A

Current Assets ÷ Current Liabilities = Current Ratio

28
Q

How would the declaration of a dividend affect a company’s balance sheet?

A

1) Retained earnings is reduced and 2) Current liabilities is increased (working capital is reduced)

29
Q

A head and shoulders top formation is considered a __________ indicator.

A

A head and shoulders top formation is considered a bearish indicator.

30
Q

How would the payment of a dividend affect a company’s balance sheet?

A

1) Current assets (cash) is reduced and 2) Current liabilities is reduced (working capital stays the same)

31
Q

______ is the measure of an asset’s volatility compared to the market as a whole.

A

Beta is the measure of an asset’s volatility compared to the market as a whole.

32
Q

According to The Dow Theory, what two averages must reach a new high or new low to confirm a major trend?

A

Dow Jones Industrial Average and Dow Jones Transportation Average

33
Q

__________ level is the price level at which point a stock stops decreasing.

A

Support level is the price level at which point a stock stops decreasing.

34
Q

Is the head and shoulders bottom formation the reversal of an upward or downward trend?

A

Downward

35
Q
A
36
Q

(Current Assets - ____________) ÷ Current Liabilities = Quick Asset Ratio (or Acid Test)

A

(Current Assets - Inventory) ÷ Current Liabilities = Quick Asset Ratio (or Acid Test)

37
Q

The analysis of a specific company (its balance sheet, income statement, etc.) are the focus of the ___________ analyst.

A

The analysis of a specific company (its balance sheet, income statement, etc.) are the focus of the fundamental analyst.

38
Q

What is the Capital Asset Pricing Model (CAPM)?

A

A model of the relationship between expected risk and expected return

39
Q

A head and shoulders bottom formation is considered a __________ indicator.

A

A head and shoulders bottom formation is considered a bullish indicator.

40
Q

Identify the following formula: Stock’s market price ÷ EPS

A

Price/Earnings (P/E) Ratio (also called the earnings multiple)

41
Q

The Dow Jones Composite Average comprises ____ industrial stocks, ____ transportation stocks, and ____ utility stocks.

A

The Dow Jones Composite Average comprises 30 industrial stocks, 20 transportation stocks, and 15 utility stocks.

42
Q

If an asset outperforms the market when prices are up, but underperforms when prices are down, what is its beta?

A

Its beta must be greater than 1.00.

43
Q

An increase in odd lot selling is a _________ indicator.

A

An increase in odd lot selling is a bullish indicator.

44
Q

Identify the following formula: (Net income - preferred dividends) ÷ Common shares outstanding

A

Earnings Per Share (EPS)

45
Q

How would the issuance of debt affect a company’s balance sheet?

A

1) Current assets (cash) is increased and 2) Long-term liabilities is increased (Working capital is increased)

46
Q

The breakout of an area of support is a __________ indicator.

A

The breakout of an area of support is a bearish indicator.

47
Q

____________ - ____________ = Working Capital

A

Current Assets - Current Liabilities = Working Capital

Series 7 by Chapter (24 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions