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Series 86,,,, questions and answers certified 2024
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Series 86,,,, questions and answers certified 2024
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Series 86Demand Elasticity - correct answer ✔[Q demand change / Q Average] / [P
Change / P Average] ; if >1 then demand is elastic (demand changes more
than price)
Price-Quantity-Revenue (revenue stays same); EX: if price declines 6%, what
increase in sales is needed to maintain revenue - correct answer ✔%
change in price / compliment % of price change
Price-Quantity-Revenue (with revenue increase): if price declines 6% what
increase in sale is needed to increase revenue by 8% - correct answer ✔(%
change in price + % increase in revenue) / compliment % of price change
Correlation: direction (+1, 0, -1); how to do it quickly - correct answer ✔+1=
highly correlated; 0= no correlation; -1= negatively correlated; {look for
direction first, the degree of changes)
Industry Models: Pure Competition - correct answer ✔many producers of a
commodity
Oligopoly - correct answer ✔serveral large producers controlling 70-80% of
the market share
Duopoly - correct answer ✔two producers control the market
Monopoly - correct answer ✔single producer
,Monopolistic Competition - correct answer ✔many producers each with a
monopoly in an individual market
Cartel - correct answer ✔a group of producers with an agreement to set
prices
Monopsony - correct answer ✔one buyer (EX: US Government)
Profit Margin - correct answer ✔NI / gross revenue
Operating Leverage: If increase unit sales which company has faster margin
growth {A= low fixed, high variable; B= high fixed, low variable} - correct
answer ✔company B because they make more per unit sold; if sales
decrease company B would also faster margin declines because of profits lost
per unit and higher fixed costs
Proxy statements - correct answer ✔management compensation, ownership
Form 4 - correct answer ✔Insider/affiliate ownership filing
Reg. 13D - correct answer ✔Ownership +5%
Form 144 - correct answer ✔large insiders selling restricted stock
Executive stock option information can be found where? - correct answer
✔Proxy & 10-K Footnotes
, Statement of Cash Flow (sections): - correct answer ✔Operating, Investing;
Financing
Statement of CF: Operating - correct answer ✔NI, Depreciation, Deferred tax
(L), Receivables, Inventory, AP, etc...
Statement of CF: Investing - correct answer ✔Plant, Business Acquired,
etc...
Statement of CF: Financing - correct answer ✔Common stock issued, debt
(retirement/issuance), dividends
Statement of CF: Asset Decrease - correct answer ✔Source of Cash; CF
increase
Statement of CF: Asset Increase - correct answer ✔Use of Cash; CF
decrease
Statement of CF: Liability Decrease - correct answer ✔Use of Cash; CF
decrease
Statement of CF: Liability Increase - correct answer ✔Source of Cash; CF
increase
ABC Corp. paid principal on maturing debt (from RE), how will this affect
Statement of CF - correct answer ✔Liability decrease; CF decrease
Company XYZ misses Earning on low revenue, what two B.S. items are most
useful: AR, Inventory, AP, RE - correct answer ✔AR and Inventory: they
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