1
BLOOMBERG MARKET CONCEPTS
(BMC) QUESTIONS WITH VERIFIED
SOLUTIONS
What is the formula for GDP? - correct-answer - C+I+G+(X-M)
In the US, why is there a strong relationship between unemployment and GDP? -
correct-answer - Consumer spending accounts for 2/3's of the US economy. When
the number of unemployed consumers rises, there is less consumer spending.
What typically happens to nonfarm payrolls, the PMI indicator, and the housing
starts at the onset of a recession in the Untied States? - correct-answer - Nonfarm
payrolls go DOWN, the PMI indicator goes DOWN, the housing starts goes DOWN
Which of the following qualities of economic indicators do investors prize the
most? - correct-answer - Timeliness of release
Why is the release of GDP statistics less interesting to investors than the release
of other economic indicators? - correct-answer - Becuase GDP stats are released
well after other economic indicators
, 2
Which of the following important U.S. economic indicators is only available on a
quarterly basis? - correct-answer - GDP
Which economic indicator is most directly linked to the average person's cost of
living? - correct-answer - CPI
What is the main reason that investment banks create estimates of economic
indicators? - correct-answer - To know when specific economic data points are a
positive or negative surprise.
What is true of both the U.K. and the U.S.? - correct-answer - Both countries are
highly creditworthy.
What is the primary reason for U.S. government bond yields to ripple through the
bond market? - correct-answer - Government bonds form a large portion of
investor holdings, and corporate bonds are often priced relative to government
bonds.
A drop in which of the following measures would typically send a government
bond price down? - correct-answer - Creditworthiness
Investors who fear rising inflation may buy Treasury inflation protected securities
(TIPS). How do TIPS shield lenders from inflation? - correct-answer - By
compensating investors for inflation
BLOOMBERG MARKET CONCEPTS
(BMC) QUESTIONS WITH VERIFIED
SOLUTIONS
What is the formula for GDP? - correct-answer - C+I+G+(X-M)
In the US, why is there a strong relationship between unemployment and GDP? -
correct-answer - Consumer spending accounts for 2/3's of the US economy. When
the number of unemployed consumers rises, there is less consumer spending.
What typically happens to nonfarm payrolls, the PMI indicator, and the housing
starts at the onset of a recession in the Untied States? - correct-answer - Nonfarm
payrolls go DOWN, the PMI indicator goes DOWN, the housing starts goes DOWN
Which of the following qualities of economic indicators do investors prize the
most? - correct-answer - Timeliness of release
Why is the release of GDP statistics less interesting to investors than the release
of other economic indicators? - correct-answer - Becuase GDP stats are released
well after other economic indicators
, 2
Which of the following important U.S. economic indicators is only available on a
quarterly basis? - correct-answer - GDP
Which economic indicator is most directly linked to the average person's cost of
living? - correct-answer - CPI
What is the main reason that investment banks create estimates of economic
indicators? - correct-answer - To know when specific economic data points are a
positive or negative surprise.
What is true of both the U.K. and the U.S.? - correct-answer - Both countries are
highly creditworthy.
What is the primary reason for U.S. government bond yields to ripple through the
bond market? - correct-answer - Government bonds form a large portion of
investor holdings, and corporate bonds are often priced relative to government
bonds.
A drop in which of the following measures would typically send a government
bond price down? - correct-answer - Creditworthiness
Investors who fear rising inflation may buy Treasury inflation protected securities
(TIPS). How do TIPS shield lenders from inflation? - correct-answer - By
compensating investors for inflation
