1
Bloomberg Market Concepts: (Latest
2025/2026 Update) Review Questions
and Verified Answers | Grade A | 100%
Correct-
Quiz_________________?
gross domestic product (GDP) -
Answer☑️
market value of all final goods and services produced within a country
GDP = C + I + G + (X-M)
C= personal consumption
I = private investment
G = government spending
X = exports
M = imports
(C = 2/3 of US GDP)
provides backdrop for investing bc is a measure of all economic activity
"actual GDP growth has entirely lost its capacity to surprise... leading indicators... PMI
garners disproportionate attention"
Quiz_________________?
nominal GDP vs real GDP -
Answer☑️
nominal GDP = $ amount of GDP
real GDP growth = nominal GDP growth - inflation
(isolates increases in production and/or increases in prices of goods&services)
Quiz_________________?
recession -
Answer☑️
2 successive quarters of negative real GDP growth
Quiz_________________?
inflation -
,2 Answer☑️
general increase in prices of goods&services which diminishes the purchasing power of
money
(a unit of money tomorrow would buy less than the same unit of money today)
Quiz_________________?
primary sources of inflation data -
Answer☑️
1) personal consumption expenditures (PCE)
^^ measure of price changes in consumer goods and services
^^ shows what consumers are spending their income on
2) consumer price index (CPI)
^^ based on a representative basket of goods&services
^^ difficulties w/ being truly representative bc times, interests, & tech change
^^ CPI basket is updated @ start of ea yr to reflect previous yr
Quiz_________________?
unemployment -
Answer☑️
consumer spending is almost purely driven by salaries
^^ economy tends to shrink when more people lose their jobs (depresses GDP growth)
1) nonfarm payrolls
^^ most important unemployment indicator
^^ measures monthly change in # of US employees
Quiz_________________?
business confidence -
Answer☑️
businesses make large investments and hire people when they feel confident there will
be additional demand for their goods&services
1) purchasing managers index (PMI)
^^ index of US manufacturing activity
^^ surveys people in charge of buying goods and services for corporations
^^ above 50 = optimism, below 50 = pessimism
Quiz_________________?
housing -
Answer☑️
1) housing starts
^^ before construction begins, must be confident that future home buyers can assume
30 yr mortgages
^^ after buying a new house, consumer also purchases appliances, interior decorations,
etc
, Quiz_________________?
3
main entities that trade currencies -
Answer☑️
1) financial institutions buying&selling securities in foreign currencies
2) corporations selling goods&services across borders
3) travelers changing currencies for personal use
Quiz_________________?
pegged currencies -
Answer☑️
currencies that are linked to another currency with a locked exchange rate
^^ done to offer impression of certainty
^^ oftentimes difficult to convince others that pegged currency is as strong as peg
peg currency using FX reserves
^^ "a stack of cash used to manipulate supply and demand of currency"
^^ USD = most common FX reserve currency bc most liquid
govs also lift interest rates to defend pegs
Quiz_________________?
triangular arbitrage -
Answer☑️
keeping currency matrix fixed so you can't make money converting between currencies
Quiz_________________?
currency valuation -
Answer☑️
change in rate of one currency pair only tells relative value of those two currencies
^^ use trade-weighted baskets to determine overall strength or weakness of a currency
(identical goods&services should cost the same, no matter where they're sold around
the world)
Quiz_________________?
main currency drivers -
Answer☑️
1) surprise changes in interest rates
^^ rise in interest rates in one country will cause that country's currency to strengthen
relative to another
2) surprise changes in inflation
^^ money supply of one country expands rapidly compared to another country...
exchange rate of first country will depreciate against the second country
3) surprise changes in trade
^^ when exporting, foreign buyer needs to buy home currency of the exporter
(x-m) = positive = demand for home currency
^^ when importing, need to sell home currency in order to buy currency of foreign seller
Bloomberg Market Concepts: (Latest
2025/2026 Update) Review Questions
and Verified Answers | Grade A | 100%
Correct-
Quiz_________________?
gross domestic product (GDP) -
Answer☑️
market value of all final goods and services produced within a country
GDP = C + I + G + (X-M)
C= personal consumption
I = private investment
G = government spending
X = exports
M = imports
(C = 2/3 of US GDP)
provides backdrop for investing bc is a measure of all economic activity
"actual GDP growth has entirely lost its capacity to surprise... leading indicators... PMI
garners disproportionate attention"
Quiz_________________?
nominal GDP vs real GDP -
Answer☑️
nominal GDP = $ amount of GDP
real GDP growth = nominal GDP growth - inflation
(isolates increases in production and/or increases in prices of goods&services)
Quiz_________________?
recession -
Answer☑️
2 successive quarters of negative real GDP growth
Quiz_________________?
inflation -
,2 Answer☑️
general increase in prices of goods&services which diminishes the purchasing power of
money
(a unit of money tomorrow would buy less than the same unit of money today)
Quiz_________________?
primary sources of inflation data -
Answer☑️
1) personal consumption expenditures (PCE)
^^ measure of price changes in consumer goods and services
^^ shows what consumers are spending their income on
2) consumer price index (CPI)
^^ based on a representative basket of goods&services
^^ difficulties w/ being truly representative bc times, interests, & tech change
^^ CPI basket is updated @ start of ea yr to reflect previous yr
Quiz_________________?
unemployment -
Answer☑️
consumer spending is almost purely driven by salaries
^^ economy tends to shrink when more people lose their jobs (depresses GDP growth)
1) nonfarm payrolls
^^ most important unemployment indicator
^^ measures monthly change in # of US employees
Quiz_________________?
business confidence -
Answer☑️
businesses make large investments and hire people when they feel confident there will
be additional demand for their goods&services
1) purchasing managers index (PMI)
^^ index of US manufacturing activity
^^ surveys people in charge of buying goods and services for corporations
^^ above 50 = optimism, below 50 = pessimism
Quiz_________________?
housing -
Answer☑️
1) housing starts
^^ before construction begins, must be confident that future home buyers can assume
30 yr mortgages
^^ after buying a new house, consumer also purchases appliances, interior decorations,
etc
, Quiz_________________?
3
main entities that trade currencies -
Answer☑️
1) financial institutions buying&selling securities in foreign currencies
2) corporations selling goods&services across borders
3) travelers changing currencies for personal use
Quiz_________________?
pegged currencies -
Answer☑️
currencies that are linked to another currency with a locked exchange rate
^^ done to offer impression of certainty
^^ oftentimes difficult to convince others that pegged currency is as strong as peg
peg currency using FX reserves
^^ "a stack of cash used to manipulate supply and demand of currency"
^^ USD = most common FX reserve currency bc most liquid
govs also lift interest rates to defend pegs
Quiz_________________?
triangular arbitrage -
Answer☑️
keeping currency matrix fixed so you can't make money converting between currencies
Quiz_________________?
currency valuation -
Answer☑️
change in rate of one currency pair only tells relative value of those two currencies
^^ use trade-weighted baskets to determine overall strength or weakness of a currency
(identical goods&services should cost the same, no matter where they're sold around
the world)
Quiz_________________?
main currency drivers -
Answer☑️
1) surprise changes in interest rates
^^ rise in interest rates in one country will cause that country's currency to strengthen
relative to another
2) surprise changes in inflation
^^ money supply of one country expands rapidly compared to another country...
exchange rate of first country will depreciate against the second country
3) surprise changes in trade
^^ when exporting, foreign buyer needs to buy home currency of the exporter
(x-m) = positive = demand for home currency
^^ when importing, need to sell home currency in order to buy currency of foreign seller
