Bloomberg Market Concepts Review Questions with Correct Answers

GDP formula C + I + G + (X-M) c = personal consumption i = investment g = government spending x-m = exports - imports What is a recession 2 consecutive quarters of negative GDP growth Global reserve currency the preferred currency, US Dollar Major floating currency leading 10 currencies Emerging floating currency No easy to convert, low liquidity Sentimental analysis assumes investors can't always max profits and min risks Yield differential Difference in interest rates in currencies Direct intervention (FX) Buy and sell own currencies Verbal intervention (FX) Warn market of buying and selling own currencies IR intervention (FX) Adjust IR to increase investor demand Counterparty-settlement risk Not paying trader back because of time zones Continuous linked settlement removes settlement risk Spot price price to exchange one currency for another Call BUY Put SELL Credit ratings agencies rate bonds AAA