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Summary BMC Fixed Income test, Complete questions & Answers.
- Course
- FIN 4486
- Institution
- Florida International University
Summary BMC Fixed Income test, Complete questions & Answers.
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BMC1. Main measure of economic activity
8% compounded annual growth since about 1960: The primary of GDP
2. If the measurement of economic activity evolves, GDP can change: In 2015, an
accounting gimmick gave Ireland a 26% growth rate in GDP. what does this event reflect
about the nature of GDP?
-Because the GDP is official, its numbers are not subject to interpretation.
-Governments are required to change GDP calculations every five years.
-Inputs to GD{ are all qualitative, not quantitative
-If the measurement of economic activity evolves, GDP can change.
3. -Economic growth
-Inflation
-Unemployment
-Business confidence
-Housing: Essential economic indicators
4. -Measured by GDP
- GDP = C + I + G + (X-M)
- ECST function to see breakdown: Economic growth
5. It went down.: Consider the GDP formula. A country is undergoing a boom in
consumption of domestic and foreign luxury goods. In one year, the dollar growth in
imports is greater than the dollar growth in domestic consumption. Assuming all else
equal, what happened to GDP?
-There is not enough info to tell
-It went down
-Stayed the same
-It went up
6. Nominal GDP growth - inflation = real GDP growth: Inflation
7. : Inflation erodes the value of bonds. Fixed income chairs utilize bonds.
8. a general increase in prices and fall in the purchasing value of money.: In- flation
9. Quarterly GDP report: the whole economy is the data input, the inflation source
is the GDP price deflator.
Monthly CPI: Bureau of labor of statistics posts it, the data input is a average basket
of goods and services, and the inflation source is the labor depart- ments inflation
report.: Where does one find inflation?
10. Measures the number of people who are able to work, but do not have a job
during a period of time.: Unemployment
, BMC
11. Consumer spending accounts for two-thirds of the U.S. economy. When the number
of unemployed consumers rises, there is less consumer spending.: In the U.S. why is
there a strong relationship between unemployment and GDP?
-As the economy booms, private investment, government spending, and net exports will
cause GDP to rise, leading to unemployment.
-Consumer spending accounts for two-thirds of the US economy. When the number of
unemployed consumers rises, there is less consumer spending.
-As the U.S. is a net exporter, exports go down when workers are unemployed. This is
because there are fewer workers manufacturing products for the global markets.
-In the US, government spending accounts for 17% of GDP. When unemployment rises,
governments spend more on unemployment benefits. Therefore, GDP rises.
12. PMI: Which of the following lines is the best leading economic indicator?
-Nonfarm payrolls
-PMI
-Real GDP growth
-U.S. auto sales
13. An increase of 2% in GDP and a population growth of 0%.
(Want to find biggest difference in GPD to pop growth): GDP per capita is a measure of
prosperity because it divides the total GDP of a country by its population. Which of the below
forecasts for a country would result in the highest GDP per capita growth.
14. Nonfarm payrolls go DOWN, the PMI indicator goes DOWN, the housing starts
goes UP.: What typically happens to nonfarm payrolls, the PMI indicator, and housing starts
at the onset of a recession in the United States?
15. -Real GDP growth is the main gauge of economic health.
-Economic growth is cyclical, with a series of booms and busts.
-Investors interpret the economy through economic indicators.
-Leading indicators attract the most investor interest.: The primary of GDP
16. Shows you all economic releases of the world through the year.: WECO function
17. Timeliness of release: Which of the following qualities of economic indicators do
investors prize the most?
-Sample size
-Government source
, BMC
-Timeliness of release
-Rigor
18. Because GDP statistics are released well after other economic indicators-
: Why is the release of GDP statistics less interesting to investors than the release of other
economic indicators?
-Because the formula for GDP includes not only private investment but also other irrelevant
factors
-Because GDP is not official government data
-Because governments consistently alter their GDP measurement methods
-Because GDP are released well after other economic indictors
19. GDP: Which of the following important US economic indictors is only available on a
quarterly basis?
Nonfarm payrolls
CPI
PMI
GDP
20. CPI: Which economic indicator is most directly linked to the average person's cost
of living?
PMI
CPI
Nonfarm payrolls
GDP
21. -GDP estimation by governments is time-consuming, periodic activity.
-GDP arrives too late to be useful to investors.
-Instead, investors glean GDP growth through more timely indicators.
-The indicators that are released first attract the most attention.: Monitoring GDP
22. ECSU: Economic surprise monitor
23. To know when specific economic data points are a positive or negative
surprise.: What is the main reason that investment banks create estimates of economic
indictors?
-To hold governments accountable for management of their economies.
-To increase real GDP growth by exporting their intellectual property to foreign investors.
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