Bloomberg Market Concepts Questions Study Guide Rated A+

When investors doubt the creditworthiness of a borrower, what should happen to the price and yield of the bond? {Ans: Prices go down, yields go up}What does the Big Mac index show? {Ans: How currencies may be overvalued or undervalued.}What is the main reason that investment banks create estimates of economic indicators? {Ans: To know when specific economic data points are a positive or negative surprise.}Why is the release of GDP statistics less interesting to investors than the release of other economic indicators? {Ans: Becuase GDP stats are released well after other economic indicators}Which of the following is the biggest pitfall of economic indicators? {Ans: They are not sufficiently timely to make informed investment decisions}Why do companies do IPO's? {Ans: IPO's intintivize entrepreneurs to innovate as IPOs provide ways for entrepreneurs to monetize their work.}