Bloomberg Market Concepts: Equities and Economic Indicators Exam Questions and Answers

Bloomberg Market Concepts: Equities and Economic Indicators Exam Questions and Answers How do companies usually list on the stock exchange? - Correct Answer ️️ -Through Initial Public Offerings (IPOs) What makes the stock market more appealing than the bond market for some investors? - Correct Answer ️️ -The opportunity to earn a huge return Based on the attached SPX GICS Sector table from the WEI function below, which sector contributed the largest daily decrease to the SPX Index at this time? - Correct Answer ️️ -Information Technology Based on the MOV screenshot taken on 7/19/2023 which stock is contributing the most to the SPX index? - Correct Answer ️️ -CRM Considering the details on company listings, which of the following is NOT a valid reason for a company to delist from a stock exchange? - Correct Answer ️️ -the company's owners wish to pursue other business interests What is the significance of the financial leverage Jenny benefited from in her house purchase? - Correct Answer ️️ -It amplified the impact of her income changes on her discretionary income What happens to the residual cash flows for equity holders if a company's revenue decreases but its fixed costs remain the same? - Correct Answer ️️ -The residual cash flows for equity holders decrease What is the best-case scenario for a bond investor who holds a bond to maturity? - Correct Answer ️️ -They receive their original investment back plus an amount equal to the yield each year A person who is risk-averse is more likely to invest in - Correct Answer ️️ -Bonds, because they offer known fixed repayments Based on the two TRA screenshots below, what can we infer about he effects of additional returns from reinvesting dividends in the INDU versus the CCMP indices over this 5-year period? - Correct Answer ️️ -Reinvesting Dividends have a much greater effect in the INDU index because it is composed of much higher dividend paying stocks than the CCMP index. Based on the WCRS screenshot below, if at the end of 2013 you had invested an equal weighted portion of $100,000 in NVIDIA and nine other companies that went bankrupt, how would your performance compare to the SPX return at this time, and what does this imply about the nature of stock market returns? - Correct Answer ️️ -You would have outperformed the SPX by over 1000%. This demonstrates the positive asymmetry of stock market returns How does the potential for losses in bond investments differ from that of equity investments in the event of a company's bankruptcy? - Correct Answer ️️ -Equity holders usually lose more as bond holders have more rights to collateral Assume expected inflation is 4% per year. Which company would give you the highest expected return? - Correct Answer ️️ -Company C's stock price is expected to rise 8% per year plus the rate of inflation while not paying any dividend If a company goes bankrupt, how does the recovery process typically differ between bondholders and equity holders, and what impact does this have on their respective investment risks? - Correct Answer ️️ -Bondholders have first claim on assets, reducing their investment risk compared to equity holders. What does the release of earnings announcements have in common with the release of economic indicators? - Correct Answer ️️ -Both are scheduled in advance How might the Efficient Market Hypothesis (EMH) explain the immediate fluctuation of a company's stock price following an earnings report release? - Correct Answer ️️ -EMH suggests that the stock price should only respond to the earnings report if it contains unexpected information Based on the SPLC screenshot what can we imply about Apple's supply chain risk factors? - Correct Answer ️️ -Apple's concentrated supply reliance on Hon Hai Precision is its largest supply chain risk factor. Based on the attached article, what could be inferred about the impact of stock price changes on Apple's buyback strategy? - Correct Answer ️️ -Higher stock prices in 3Q could have resulted in fewer buybacks, hence the slight disappointmen