Bloomberg Market Concepts Certification New Update Actual Test with complete solution

Why do companies do IPOs? - Answer-IPOs incentivize entrepreneurs to innovate as IPOs provide a way for entrepreneurs to monetize their work. Why do company manager-owners smile when they ring the stock exchange bell at their IPO? - AnswerAn IPO reveals the value of the manager-owners' stake. In 1999, James Glassman and Kevin Hassett published a book called "Dow 36,000". At the time, the Dow Jones Industrial Average Index was just under 12,000. Which of the following is a potential substitute for the book title? - Answer-"The Sum of the Share Prices of All 30 Dow Jones Members Will Triple" What is the prime reason that Jenny's discretionary income is more volatile than her salary? - AnswerHer mortgage payments and necessities are fixed. A luxury cell phone maker has a high fixed-cost base and a lot of debt. Which stakeholder in the company would you rather be? - Answer-a shareholder in a booming economy What would the approximate return be on the S&P 500 from the trough of March 2009 (680) to the end of 2013 (1,848), ignoring dividends? - Answer-170% Assume that an investor in the S&P 500 reinvests his dividends. According to the chart, what approximate return would this investor have reaped from the early 2009 (1,000) trough to the endpoint (3,400)? - Answer-340% Why are equities volatile? - Answer-Due to the residual nature of earnings Which of the following statements is true? - Answer-When you buy an equity, the most you can lose is 100% and your potential gain is unlimited.Company A pays a dividend of 2%. Company B's stock price increases by 1% plus the inflation rate every year. Company C pays 3% dividends, and its stock price decreases every year by 2%. Company D pays 0% dividends, and its stock price does not increase year over year. If the companies are otherwise identical, which would you invest in? - Answer-Company B You buy the stock of four consumer goods companies in March 2014 and hold them for five years until March 2019. Here are the TRA charts from Bloomberg for all four stocks. The "Buy Price" in the top lefthand corner is the price you paid for each stock. The price of the stock in March 2019 is noted in the chart's legend. The legend also states the Dividend Adjusted Value of the stock in March 2019, which is the value of the stock including reinvested dividends over the holding period. For which stock did the bull of the total return come from dividends? - Answer-Colgate-Palmolive What does the release of earnings announcements have in common with the release of economic indicators? - Answer-Both are scheduled in advance. The number at the bottom right of each supplier's box shows the portion of Boeing's total costs in the last year that went to that supplier... - Answer-60.68%