Bloomberg Concept Questions and Correct Verified Answers
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Bloomberg
Institution
Bloomberg
Bloomberg Concept Questions and
Correct Verified Answers
As a general rule, what percentage of debt to GDP will make a government's bond yields spike?
- there is no general rule
What is true of both the U.K. and the U.S.? - Both countries are highly creditworthy.
What is the primary reason for...
Bloomberg Concept Questions and
Correct Verified Answers
As a general rule, what percentage of debt to GDP will make a government's bond yields spike?
- ✔✔there is no general rule
What is true of both the U.K. and the U.S.? - ✔✔Both countries are highly creditworthy.
What is the primary reason for U.S. government bond yields to ripple through the bond market? -
✔✔The large government bond market competes for investors attention via yields
A rise in which of the following measures would typically send a government bond price up? -
✔✔Creditworthiness
How do investors compare bonds? - ✔✔by comparing the yields of single bonds
Which of the following is the strongest driver of inflation? - ✔✔wartime activities
Investors who fear rising inflation may buy Treasury Inflation Protected Securities (TIPS). How do
TIPS shield lenders from inflation? - ✔✔By compensating investors for inflation
What is the Federal Reserve's favorite inflation gauge? - ✔✔Core PCE
Why does the yield curve naturally slope upwards? - ✔✔To compensate leaders for the greater risk
of long-term loans compared to short-term loans
Why did the corporate spread significantly widen during the 2008 market crash? - ✔✔Corporate
bond issuers go bankrupt more frequently then governments, as they do no have a tax base to fall
back on in hard times
, What impact will a tightening of the corporate spread most likely have on a company?` -
✔✔A tendency to expand the borrowing capacity of the company.
What are the three main transmission mechanisms by which the yield curve affects the economy? -
✔✔Corporate impact, global impact, consumer impact.
The purchase of which of the following products is most affected by interest rates? - ✔✔A house
What is the primary driver of the left-hand end of the yield curve? - ✔✔Central bank interest rates
Why does the yield curve tend to invert shortly before a recession? - ✔✔An inverted yield curve
means that bond traders are predicting interest rate cuts, and interest rate cuts happen in response to a
recession.
Why do companies do IPOs? - ✔✔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 - ✔✔An
IPO crystalizes the value of the manager-owners stake
What is the prime reason that Jenny's discretionary income is more volatile than her salary? -
✔✔Her mortgage payments and necessities are fixed
A wedding planning company has a high fixed-cost base and a lot of debt. Who would you rather be?
- ✔✔A shareholder in a booming economy.
Why are equities volatile? - ✔✔Due to the residual nature of earnings
Which of the following statements is true? - ✔✔When you buy an equity, the most you can lose
is 100% and your potential gain is unlimited.
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