Bloomberg Market Concepts Complete Solution guide_
Answered 2022.
"New news" moves markets. Accordingly, the economic indicators that heralds "new news"
are of the most value to traders and investors.
✅- timeliness of release
GDP statistics are typically released by the government a month or more after the period in
question, by which point dozens of other indicators have been released.
✅- Because GDP statistics are released well after other economic indicators
Nonfarm payrolls, CPI and PMI are published monthly. GDP is only published on a quarterly
basis.
✅- GDP
Which economic indicator is most directly linked to unemployment?
✅- nonfarm payrolls
What is the main reason that investment banks create estimates of economic indicators?
✅- to know when specific economic data points are a positive or negative surprise
Which of the following is the biggest pitfall of economic indicators?
1. they do not take into account seasonality
2, they are not sufficiently timely to make investment decisions
3. they only serve as proxys for economic activity
4. they do not consistently presage turning points
✅- they do not consistently presage turning points
In 1994, the Mexican peso declined against the US dollar by 37% during the so-called
Tequila Crisis. What exacerbating factor did Mexico's Tequila Crisis have in common with
the Argentine crisis of 2002?
✅- both countries had large dollar-denominated debts
What are 3 examples of failed pegs?
✅- 1. British sterling against the Deutsch mark in 1992
2. Mexican peso against the US dollar in 1994
3. Argentine peso against the US dollar in 2002
Answered 2022.
"New news" moves markets. Accordingly, the economic indicators that heralds "new news"
are of the most value to traders and investors.
✅- timeliness of release
GDP statistics are typically released by the government a month or more after the period in
question, by which point dozens of other indicators have been released.
✅- Because GDP statistics are released well after other economic indicators
Nonfarm payrolls, CPI and PMI are published monthly. GDP is only published on a quarterly
basis.
✅- GDP
Which economic indicator is most directly linked to unemployment?
✅- nonfarm payrolls
What is the main reason that investment banks create estimates of economic indicators?
✅- to know when specific economic data points are a positive or negative surprise
Which of the following is the biggest pitfall of economic indicators?
1. they do not take into account seasonality
2, they are not sufficiently timely to make investment decisions
3. they only serve as proxys for economic activity
4. they do not consistently presage turning points
✅- they do not consistently presage turning points
In 1994, the Mexican peso declined against the US dollar by 37% during the so-called
Tequila Crisis. What exacerbating factor did Mexico's Tequila Crisis have in common with
the Argentine crisis of 2002?
✅- both countries had large dollar-denominated debts
What are 3 examples of failed pegs?
✅- 1. British sterling against the Deutsch mark in 1992
2. Mexican peso against the US dollar in 1994
3. Argentine peso against the US dollar in 2002
