bloomberg market concepts exam practice questions and answers 100% pass

bloomberg market concepts exam practice questions and answers 100% pass How accurately do GDP portray the economy and why? - Correct Answer ️️ - Inaccurately because the scope of GDP measurements can change. Consider the formula GDP = C+I+G+(X-M). 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 nothing else has changed, what happened to GDP? - Correct Answer ️️ -It went down what is the meaning of each letter in the GDP formula, C+I+G+(X-M). - Correct Answer ️️ -C= Consumer spending I = Investment (Gross Fixed Capital Formation) G= Government Spending X= Exports M= Imports Here is the most important economic data for Australia and Sweden. which economy did better year-over-year (YOY) in the fourth quarter of 2013 compared to the fourth quarter of 2012? Use the two charts to investigate. - Correct Answer ️️ -Sweden performed better In the United States, why is there a strong correlation between unemployment and GDP? - Correct Answer ️️ -Consumer spending accounts for two-thirds of the U.S. economy when the number of unemployed consumers rises, there is less consumer spending. Here is a chart showing both nominal GDP growth and real GDP growth for a country. Which of the following can be a true statement at the time the chart was captured? - Correct Answer ️️ -The country has deflation. The bottom line is nominal growth and the top line is real growth. Which of the following lines is the best leading economic indicator? - Correct Answer ️️ -PMI What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at the onset of a recession in the United 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 ️️ -Because GDP statistics are released well after other economic indicators. 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 unemployment? - Correct Answer ️️ -nonfarm payrolls 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. Which of the following is the biggest pitfall of economic indicators? - Correct Answer ️️ -They do not consistently presage turning points. Which country is the fourth biggest importer and exporter? - Correct Answer ️️ -Japan Which of the following is not an example of a failed peg? - Correct Answer ️️ -Hong Kong dollar against the U.S. dollar in 1997. What generally happens when a central bank unexpectedly increases interest rates? - Correct Answer ️️ -The currency strengthens. Which driver weakened the Swiss franc? - Correct Answer ️️ -A surprise change in inflation expectations What does the Big Mac index show? - Correct Answer ️️ -How currencies may be overvalued or undervalued. Which of the following are short-term drivers of currency valuation? - Correct Answer ️️ -Surprise changes in interest rates, inflation, and trade. By what mechanism do interest rates affect currency values? - Correct Answer ️️ - Global investors are attracted by higher bond yields in high interest rate countries. Which of these headlines could move a currency pair? - Correct Answer ️️ -U.S. Stocks rally on Fed's Surprise reduction of Interest Rate. What is the most common target inflation rate for an advanced economy? - Correct Answer ️️ -2% What was the primary goal of Abenomics? - Correct Answer ️️ -To halt the vicious cycle of deflation Here is the vicious deflationary cycle. What step connects the lower left gray arrow to the upper right blue arrow? - Correct Answer ️️ -prices decline Were the two oil crises in the 1970s linked to deflation or inflation? - Correct Answer ️️ -Inflation Why would Jack Welch suggest putting all company plants on barges? - Correct Answer ️️ -To respond quickly to changes in the currency markets. Legendary investor Warren Buffett said, "Gold gets dug out of the ground..... Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head." Based on this quotation, what quality of gold is he referring to? - Correct Answer ️️ -Its storage costs Which of the following options is the best way for investors to manage currency risk? - Correct Answer ️️ -By locking in forward rates for known foreign payments. What quality of U.S. government bonds causes investors to buy them when market volatility rises? - Correct Answer ️️ -U.S. government bonds are considered low risk. Why is fixed income called fixed income? - Correct Answer ️️ -Because the repayment amounts and timings are fixed for ordinary bonds