Bloomberg Course 1: Part 3 - Fixed Income Latest Update Graded A+

Bloomberg Course 1: Part 3 - Fixed Income Latest Update Graded A+ 2 Bond yield drivers 1. Credit Risk 2. Macroeconomics 2 credit risk indicators 1. Credit ratings 2. Credit default swaps 2 factors which influence Central bank decision making 1. Inflation measures 2. Output gap 2 Tools of central bank 1. Short term interest rates 2. Statements 3 Inflation measures 1. GDP deflator 2. CPI 3. CPCE 3 Risk factors for bond holders/buyers 1. Default 2. Inflation 3. Rise in interest rates A financial contract whereby a buyer of corporate or sovereign debt in the form of bonds attempts to eliminate possible loss arising from default by the issuer of the bonds. This is achieved by the issuer of the bonds insuring the buyer's potential losses as part of the agreement. Credit default swap a graph of yield to maturity as a function of term to maturity yield curve A shortfall of tax revenue from government spending Budget deficit Amount of government bonds in existence at the end of 2016 2.1 million An _____________ in interest rates will result in a higher mortgage increase An institution designed to oversee the banking system and regulate the quantity of money in the economy. Establishes interest rates and stabilizes