Bloomberg Concept Questions Study Guide Questions And Correct Answers

Which driver weakened the Swiss franc? {Ans: A surprise change in inflation expectations}Why does the yield curve naturally slope upwards? {Ans: To compensate leaders for the greater risk of long-term loans compared to short-term loans}What may be a problem of comparing the P/E of a stock to the P/E of the overall market? {Ans: A stock's P/E ratio can remain above or below market average for extended periods.}Which of the following are short-term drivers of currency valuation? {Ans: surprise changes in interest rates, inflation, and trade}What does the Big Mac index show? {Ans: how currencies may be overvalued or undervalued}What is the primary reason for U.S. government bond yields to ripple through the bond market? {Ans: The large government bond market competes for investors attention via yields}