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20 Cards in this Set
- Front
- Back
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What is GDP?
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Gross Domestic Product
Measures the output of goods and services produced within the U.S without regard to origin of the producer |
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What is CPI?
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Consumer Price Index
Measures the prices of a fixed basket of goods bought by typical consumers |
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What is Disinflation?
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When inflation rates go down
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What is deflation?
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Decline in level of prices
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What is the business cycle?
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Expansion (Recovery)
Peak Recession (Contraction) Trough |
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What does Keynesian theory promote?
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Taxes and expenditures to accomplish goals
Fiscal policy Congress held responsible for implementation |
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What does Monetary Theory promote?
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Money supply to accomplish goals
Monetary policy Fed Reserve responsible for implementation |
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What are tools least used by The Fed?
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Regulation T
-Extension of credit by broker dealers Discount Rate -Back up source of liquidity to depository institutions on a short term basis (only rate directly controlled by fed) Reserve requirement -Amount of money a bank must maintain based on percentage of deposits |
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What is the FOMC?
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Federal Open Market Committee
Trades US treasures through "primary government dealers" Action: Increase money supply and easy credit by increasing deposits and reserves (BUY) Decrease money supply and tighten credit by decreasing deposits and reserves (SELL) |
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What are the leading economic indicators?
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Average workweek
Initial claims for unemployed New orders for consumer goods and materials Money supply (M2) S&P 500 Index of consumer expectations Interest rate spread (10 year treasuries - fed funds rate) |
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What are the Coincident Economic Indicators?
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Industrial production
Manufacturing and trade sales Personal income less transfer payments Employees on non-agricultural payrolls |
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What are the lagging economic indicators?
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Average duration of employment
Prime Rate CPI for services Labor cost per unit Commercial and industrial loans |
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What does market cap NOT include?
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Treasury shares
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What are the cap levels of stocks?
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Large cap = 10b
Mid cap = 2b - 10b Small Cap = 300m - 2b Micro Cap = 50m - 300m Nano Cap = Below 50 |
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What is the interbank market?
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Central bank
Inverse relationship between USD and other currencies |
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How do currency fluctuations affect U.S imports and exports?
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A strong dollar will lower import prices and increase export prices
A weak dollar will increase import prices and lower export prices A weak dollar will have a positive effect on overseas investments while a strong dollar will have the opposite effect |
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What is exchange rate risk?
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Receiving revenue and incurring costs in foreign currencies
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What are the main investment objectives?
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Growth
Value Growth at reasonable prices |
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What are the kinds of investment risk?
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Inflationary risk
Liquidity risk Market or systematic risk (Beta) |
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What are some examples of investment strategies?
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Momentum trading
Short selling Market Neutral Arbitrage investing Index Investing Distressed Investing |
