Answer: B

Rationale: The normal sequence of the economic cycle is a period of expansion, followed by an economic peak (prosperity), followed by a decline in economic activity (recession), followed by an economic recovery leading to further expansion etc.

Answer: C

Rationale: The basic definition of a security is: an investment in a common enterprise for profit, with management provided by a third party.

Answer: C

Rationale: The management "styles" are basically active asset management (the manager selects the specific investments) or "passive" asset management, where the manager uses index funds as the investment vehicle. Diversification is not a style; rather it is a technique used to reduce risk.

Answer: C

Rationale: The key word is "riskless." Treasury bills mature in 52 weeks or less and are issued by the U.S. Government, the safest issuer available.

Answer: A

Rationale: The performance of cyclical stocks follows the business cycle. In times of GDP expansion, they do well; in times of recession, they do poorly. The classic cyclical stocks are home building, automobile manufacturers and durable goods producers. All of these purchases are deferrable in hard times. Pharmaceutical companies are defensive and are not affected by the business cycle; in good times or bad, people must take prescribed drugs. Gold mining stocks are counter-cyclical. In bad economic times, people “flee to safety” and buy gold stocks. Computer software companies are growth companies.