Bloomberg Market Concepts Certification Questions
with correct answers
Why do companies do IPOs? Correct Answer-IPOs incentivize
entrepreneurs to innovate as IPOs provide a way for entrepreneurs to
monetize their work.
Why do company manager-owners smile when they ring the stock
exchange bell at their IPO? Correct Answer-An IPO reveals the value of
the manager-owners' stake.
In 1999, James Glassman and Kevin Hassett published a book called
"Dow 36,000". At the time, the Dow Jones Industrial Average Index was
just under 12,000. Which of the following is a potential substitute for the
book title? Correct Answer-"The Sum of the Share Prices of All 30 Dow
Jones Members Will Triple"
What is the prime reason that Jenny's discretionary income is more
volatile than her salary? Correct Answer-Her mortgage payments and
necessities are fixed.
A luxury cell phone maker has a high fixed-cost base and a lot of debt.
Which stakeholder in the company would you rather be? Correct
Answer-a shareholder in a booming economy
What would the approximate return be on the S&P 500 from the trough
of March 2009 (680) to the end of 2013 (1,848), ignoring dividends?
Correct Answer-170%
, Assume that an investor in the S&P 500 reinvests his dividends.
According to the chart, what approximate return would this investor
have reaped from the early 2009 (1,000) trough to the endpoint (3,400)?
Correct Answer-340%
Why are equities volatile? Correct Answer-Due to the residual nature of
earnings
Which of the following statements is true? Correct Answer-When you
buy an equity, the most you can lose is 100% and your potential gain is
unlimited.
Company A pays a dividend of 2%. Company B's stock price increases
by 1% plus the inflation rate every year. Company C pays 3% dividends,
and its stock price decreases every year by 2%. Company D pays 0%
dividends, and its stock price does not increase year over year. If the
companies are otherwise identical, which would you invest in? Correct
Answer-Company B
You buy the stock of four consumer goods companies in March 2014
and hold them for five years until March 2019. Here are the TRA charts
from Bloomberg for all four stocks. The "Buy Price" in the top left-hand
corner is the price you paid for each stock. The price of the stock in
March 2019 is noted in the chart's legend. The legend also states the
Dividend Adjusted Value of the stock in March 2019, which is the value
of the stock including reinvested dividends over the holding period. For
which stock did the bull of the total return come from dividends?
Correct Answer-Colgate-Palmolive
with correct answers
Why do companies do IPOs? Correct Answer-IPOs incentivize
entrepreneurs to innovate as IPOs provide a way for entrepreneurs to
monetize their work.
Why do company manager-owners smile when they ring the stock
exchange bell at their IPO? Correct Answer-An IPO reveals the value of
the manager-owners' stake.
In 1999, James Glassman and Kevin Hassett published a book called
"Dow 36,000". At the time, the Dow Jones Industrial Average Index was
just under 12,000. Which of the following is a potential substitute for the
book title? Correct Answer-"The Sum of the Share Prices of All 30 Dow
Jones Members Will Triple"
What is the prime reason that Jenny's discretionary income is more
volatile than her salary? Correct Answer-Her mortgage payments and
necessities are fixed.
A luxury cell phone maker has a high fixed-cost base and a lot of debt.
Which stakeholder in the company would you rather be? Correct
Answer-a shareholder in a booming economy
What would the approximate return be on the S&P 500 from the trough
of March 2009 (680) to the end of 2013 (1,848), ignoring dividends?
Correct Answer-170%
, Assume that an investor in the S&P 500 reinvests his dividends.
According to the chart, what approximate return would this investor
have reaped from the early 2009 (1,000) trough to the endpoint (3,400)?
Correct Answer-340%
Why are equities volatile? Correct Answer-Due to the residual nature of
earnings
Which of the following statements is true? Correct Answer-When you
buy an equity, the most you can lose is 100% and your potential gain is
unlimited.
Company A pays a dividend of 2%. Company B's stock price increases
by 1% plus the inflation rate every year. Company C pays 3% dividends,
and its stock price decreases every year by 2%. Company D pays 0%
dividends, and its stock price does not increase year over year. If the
companies are otherwise identical, which would you invest in? Correct
Answer-Company B
You buy the stock of four consumer goods companies in March 2014
and hold them for five years until March 2019. Here are the TRA charts
from Bloomberg for all four stocks. The "Buy Price" in the top left-hand
corner is the price you paid for each stock. The price of the stock in
March 2019 is noted in the chart's legend. The legend also states the
Dividend Adjusted Value of the stock in March 2019, which is the value
of the stock including reinvested dividends over the holding period. For
which stock did the bull of the total return come from dividends?
Correct Answer-Colgate-Palmolive
