FINA 061 Bloomberg Answers (Updated 2020)

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Bloomberg Answers 8NQZRLYVD3 The Primacy of GDP Knowledge Check 1 • Inaccurately because the scope of GDP measurements can change. Knowledge Check 2 • It went down. Knowledge Check 3 • Sw... eden performed better. Knowledge Check 4 • Consumer spending accounts for two-thirds of the U.S. economy. When the number of unemployed consumers rises, there is less consumer spending. SECTION QUIZ 1. Here is a chart showing both nominal GDP growth and real GDP growth for a country. Which of the following can be a true statement at the time the chart was captured? a. The country has deflation. The bottom line is nominal growth and the top line is real growth. 2. Which of the following lines is the best leading economic factor? a. PMI 3. The “misery index” is often cited in the media as a way to measure consumer pain. It is defined as the inflation rate plus the unemployment rate. Review and identify the country with the highest “misery index.” a. Argentina 4. What typically happens to nonfarm payrolls, the PMI indicator, and housing starts at the onset of a recession in the United States? a. Nonfarm payrolls go DOWN, the PMI indicator goes DOWN, the housing starts goes DOWN. Monitoring GDP SECTION QUIZ 1. Which of the following qualities of economic indicators do investors prize the most? a. Timeliness of release. 2. Why is the release of GDP statistics less interesting to investors than the release of other economic indicators? a. Because GDP statistics are released well after other economic indicators. 3. Which of the following important U.S. economic indicators is only available on a quarterly basis? a. GDP 4. Which economic indicator is most directly linked to unemployment? a. Nonfarm payrolls. Forecasting GDP Knowledge Check 1 • Above Expectations Knowledge Check 2 • Deceleration Knowledge Check 3 • Minimal Change SECTION QUIZ 1. These charts show data for four countries as of early 2016. For each country, the purple line denotes historic real GDP growth. The white line denotes the consensus estimated real GDP growth. The red line denotes the most pessimistic analyst forecast. The green line denotes the most optimistic analyst forecast. For which country is there the most controversy among the analyst community about 2016 growth? a. RUSSIA 2. What is the main reason that investment banks create estimates of economic indicators? a. To know when specific economic data points are a positive or negative surprise. 3. Which of the following is the biggest pitfall of economic indicators? a. They do not consistently presage turning points. 4. Here is a chart displaying estimates of the initial jobless claims indicator, one of the main unemployment statistics in the U.S. It measures the number of new applicants for unemployment benefits. What was the level of the analyst with the most optimistic outlook? a. 260 Currency Market Mechanics Knowledge Check 1 • JAPAN Knowledge Check 2 • Both countries had large dollar-denominated debts. Knowledge Check 3 • 107.89 SECTION QUIZ 1. Allison lives in America and has just retired. It is early 2016. She has long had dreams of cruising the fjords on the west coast of Norway, visiting Buckingham Palace in the United Kingdom, seeing the cherry blossoms in Japan, and going to the top of the Eiffel Tower in France. She last considered all four options on New Year’s Day 2008. She would like to select the trip to go on based on which country’s currency has subsequently weakened the most against the U.S. dollar. Where should she go on vacation? a. NORWAY 2. Review the currency pair charts for the Barbadian dollar against the Jamaican dollar, the Czech koruna against the Polish zloty, the Nigerian naira against the Ghanaian cedi, and the Hong Kong dollar against the Macanese pataca. Which pair is pegged. a. The Hong Kong dollar against the Macanese pataca 3. Which of the following is NOT an example of a failed peg? a. Hong Kong dollar against the U.S. dollar in 1997. 4. Use the chart below to answer the question. How many Danish crowns (DKK) will buy 100 Japanese yet (JPY)? a. 5.360 Currency Valuation Knowledge Check 1 • China Knowledge Check 2 • The currency strengthens Knowledge Check 3 • A surprise change in inflation expectations SECTION QUIZ 1. What does the Big Mac index show? a. How currencies may be overvalued or undervalued 2. Which of the following are short-term drivers of currency valuation? a. Surprise changes in interest rates, inflation, and trade 3. By what mechanism do interest rates affect currency values? a. Global investors are attracted by higher bond yields in high interest rate countries 4. Which of these headlines could move a currency pair? a. U.S. Stocks Rally on Fed’s Surprise Reduction of the Interest Rate Central Banks and Currencies SECTION QUIZ 1. What is the most common target inflation rate for an advanced economy? a. 2% 2. What was the primary goal of Abenomics? a. To halt the vicious cycle of deflation 3. Here is the deflationary cycle. What steps connect the lower left gray arrow to the upper right blue arrow? a. Prices Decline 4. Were the two oil crises in the 1970s linked to deflation or inflation? a. Inflation Currency Risk Knowledge Check 1 • They are probably heavy exporters Knowledge Check 2 • Indonesia Knowledge Check 3 • 126 Knowledge Check 4 • 40 yen Knowledge Check 5 • EUR 4,717 more SECTION QUIZ 1. Why would Jack Welch suggest putting all company plants on barges? a. To respond quickly to changes in the currency markets 2. Samsung is based in South Korea and reports in South Korean won. Samsung sells its products around the world and the geographic breakdown of its 2015 revenues is in the first chart. The other charts show how some major world currencies moved against the South Korean won through the course of 2015. Of the currencies shown, which currency movement boosted Samsung’s revenue growth the most? a. DOLLAR 3. Legendary investor Warren Buffet said, “Gold gets dug out of the ground… Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” Based on this quotation, what quality of gold is he referring to? a. Its storage costs 4. Which of the following options is the best way for investors to manage currency risk? a. By locking in forward rates for known foreign payments The Roots of the Bond Market Knowledge Check 1 • Surplus Knowledge Check 2 • Taiwan Knowledge Check 3 • U.S. Government Bonds are considered low risk Knowledge Check 4 • Because the repayment amounts and timings are fixed for ordinary bonds SECTION QUIZ 1. Why does the United States have a strong reputation for creditworthiness? a. Because it has the right to tax the wealthiest population on earth. 2. What is one reason why foreign governments lend to the U.S. government? a. To build liquid FX reserves. 3. What does one yellow bar depict in this debt distribution diagram? a. Coupon Repayment 4. Which one of the following actors benefits when interest rates go up? a. An investor who is about to buy bonds. Bond Valuation Knowledge Check 1 • Investors do not alter the [Show More]

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