Bloomberg Market Concepts Revised Questions and Answers / Sure A+

A drop in which of the following measures would typically send a government bond price down? - Creditworthiness As a general rule, what percentage of debt to GDP will make a governments bond yields spike? - There is no general rule If the yield on a fixed-coupon bond goes up, does the borrower have to pay more interest? - No, the price goes down. The payments are fixed. In the US, why is there a strong relationship between unemployment and GDP? - Consumer spending accounts for 2/3's of the US economy. When the number of unemployed consumers rises, there is less consumer spending. Investors who fear rising inflation may buy Treasury inflation protected securities (TIPS). How do TIPS shield lenders from inflation? - By compensating investors for inflation The purchase of which of the following products is most affected by interest rates? - Apartment