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lOMoARcPSD|3175982 Bloomberg Answers Financial Management (University of Massachusetts Lowell) StuDocu is not sponsored or endorsed by any kind of college or university Downloaded by Andrés Rincón () lOMoARcPSD|3175982 Bloomberg Answers 8NQZRLYVD3 The Primacy of GDP Knowledge Check 1  Inaccurately bereason the scope of GDP measurements can readjust. Knowledge Check 2  It went dvery own. Knowledge Check 3  Sweden perdeveloped better. Knowledge Check 4  Consumer spending accounts for two-thirds of the UNITED STATE economy. When the variety of unemployed consumers rises, tbelow is less customer spending. SECTION QUIZ 1. Here is a chart reflecting both nominal GDP expansion and real GDP expansion for a nation. Which of the following have the right to be a true statement at the time the chart was captured? a. The nation has actually deeation. The bottom line is nominal expansion and also the optimal line is actual growth. 2. Which of the adhering to lines is the finest leading economic factor? a. PMI 3. The “misery index” is frequently cited in the media as a method to meacertain consumer pain. It is defined as the inflation price plus the unemployment rate. Recheck out and recognize the country through the greatest “misery index.” a. Argentina 4. What typically happens to nonfarm payrolls, the PMI indicator, and also 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 adhering to attributes of economic indicators execute investors prize the most? a. Timeliness of release. 2. Why is the release of GDP statistics much less amazing to investors than the release of other financial indicators? a. Because GDP statistics are released well after other economic indications. 3. Which of the following important U.S. financial indications is just obtainable on a quarterly basis? a. GDP 4. Which financial indicator is a lot of directly connected to unemployment? a. Nonfarm payrolls. Forecasting GDP Knowledge Check 1  Above Expectations Knowledge Check 2  Deceleration Downloaded by Andrés Rincón () lOMoARcPSD|3175982 Knowledge Check 3  Minimal Change SECTION QUIZ 1. These charts present information for four countries as of at an early stage 2016. For each nation, the purple line denotes historical genuine GDP expansion. The white line denotes the agreement approximated actual GDP growth. The red line denotes the the majority of pessimistic analyst foreactors. The green line denotes the many optimistic analyst forecast. For which country is tbelow the many controversy among the analyst neighborhood around 2016 growth? a. RUSSIA 2. What is the major reason that investment financial institutions create approximates of economic indicators? a. To know when particular economic information points are a positive or negative surpclimb. 3. Which of the complying with is the best pitfevery one of economic indicators? a. They carry out not continuously presage turning points. 4. Here is a chart displaying estimates of the initial jobmuch less claims indicator, among the primary unemployment statistics in the UNITED STATE It actions the number of new applicants for joblessness benefits. What was the level of the analyst with the many optimistic outlook? a. 260 Currency Market Mechanics Knowledge Check 1  JAPAN Knowledge Check 2  Both countries had actually huge dollar-denominated debts. Knowledge Check 3  107.89 SECTION QUIZ 1. Allichild lives in America and has actually just reexhausted. It is at an early stage 2016. She has actually 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 thought about all four choices on New Year’s Day 2008. She would favor to pick the pilgrimage to go on based upon which country’s money has actually consequently weakened the a lot of versus the UNITED STATE dollar. Wbelow must she go on vacation? a. NORWAY 2. Review the currency pair charts for the Barbadian dollar against the Jamaihave the right to dollar, the Czech koruna against the Polish zloty, the Nigerian naira against the Ghanaian cedi, and also the Hong Kong dollar versus the Macanese pataca. Which pair is pegged. a. The Hong Kong dollar versus the Macanese pataca 3. Which of the adhering to is NOT an example of a failed peg? a. Hong Kong dollar versus the UNITED STATE 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 Downloaded by Andrés Rincón () lOMoARcPSD|3175982  China Knowledge Check 2  The currency strengthens Knowledge Check 3  A surpclimb readjust in inflation expectations SECTION QUIZ 1. What does the Big Mac index show? a. How currencies might be overvalued or undervalued 2. Which of the following are momentary drivers of money valuation? a. Surpincrease transforms in interest rates, ineation, and also trade 3. By what mechanism carry out interest rates affect money values? a. Global investors are attracted by greater bond returns in high interest price nations 4. Which of these headlines could relocate a money pair? a. U.S. Stocks Rally on Fed’s Surprise Reduction of the Interemainder Rate Central Banks and also Currencies SECTION QUIZ 1. What is the most common tarobtain inflation rate for an advanced economy? a. 2% 2. What was the primary goal of Abenomics? a. To halt the vicious cycle of deeation 3. Here is the deflationary cycle. What steps connect the reduced left gray arrow to the upper appropriate blue arrow? a. Prices Decline 4. Were the 2 oil dilemmas in the 1970s connected to deflation or inflation? a. Ineation 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 certainly Jack Welch indicate placing all agency plants on barges? a. To respond quickly to changes in the currency industries 2. Samsung is based in South Korea and reports in South Korean won. Samsung sells its assets approximately the world and also the geographical breakdvery own of its 2015 earnings is in the initially chart. The various other charts present how some significant world currencies relocated versus the Downloaded by Andrés Rincón () lOMoARcPSD|3175982 South Oriental won via the course of 2015. Of the currencies displayed, which currency motion raised Samsung’s revenue expansion the most? a. DOLLAR 3. Legendary investor Warren Buffet sassist, “Gold gets dug out of the ground… Then we melt it down, dig one more hole, bury it again, and pay civilization to stand roughly guarding it. It has no utility. Anyone watching from Mars would certainly be scratching their head.” Based on this quotation, what top quality of gold is he referring to? a. Its storage costs 4. Which of the following alternatives is the ideal way for investors to control 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  UNITED STATE Government Bonds are taken into consideration low hazard Knowledge Check 4  Due to the fact that the repayment quantities and also timings are addressed for ordinary bonds SECTION QUIZ 1. Why does the USA have a solid reputation for creditworthiness? a. Since it has the ideal to taxation the wealthiest population on earth. 2. What is one factor why international governments lfinish 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 among the adhering to actors benefits as soon as interemainder prices go up? a. An investor that is about to buy bonds. Bond Valuation Knowledge Check 1  Investors perform not change the calculation. Knowledge Check 2  There is no general preeminence. Knowledge Check 3  Both countries are extremely creditworthy. Knowledge Check 4  A 4% yearly yield on a crmodify risk-cost-free 10-year federal government bond from the mythical nation of Utopia Knowledge Check 5  A 5% yearly yield on an investment in 10-year U.S. federal government bonds. SECTION QUIZ 1. What is the main factor for U.S. federal government bond yield to ripple with the bond market? a. The big federal government bond industry competes for investors’ attention via yields. Downloaded by Andrés Rincón () lOMoARcPSD|3175982 2. A increase in which of the complying with procedures would typically send a federal government bond price up? a. Creditworthiness. 3. Which of the nations presented renders the biggest relative usage of short-term government financing? a. Normethod. 4. How execute investors compare bonds? a. By comparing the yields of single bonds. Central Bankers and also Interemainder Rates Knowledge Check 1  Wartime activities Knowledge Check 2  3% SECTION QUIZ 1. Here is a chart from the ILBE feature displaying U.S. 10-year inflation expectations as of beforehand 2017. At the suggest in time displayed, wbelow is the country’s 10-year inflation expectation in relation to the Central Bank’s inflation target? a. 0.0239% over 2. Investors that are afraid climbing inflation might buy Treasury Inflation Protected Securities (TIPS). How od TIPS shield lenders from inflation? a. By compensating investors for ineation. 3. What is the Federal Reserve’s favorite inflation gauge? a. Core PCE 4. Here is the output gap in the U.S. in beforehand 1975. What was likely the Fed interemainder price policy? a. To cut interemainder prices. The Yield Curve and also Why It Matters Knowledge Check 1  To compensate lenders for the greater danger of permanent loans compared to momentary loans. Knowledge Check 2  Corpoprice bond issuers go bankrupt even more commonly than federal governments, as they perform not have a taxation base to fall ago on in difficult times. SECTION QUIZ 1. What impact will a tightening of the corpoprice spcheck out a lot of most likely have on a company? a. A tendency to expand the borrowing capacity of the firm. 2. What are the 3 major transmission mechanisms whereby the yield curve affects the economy? a. Corpoprice influence, international impact, consumer impact. 3. What is the 10-year to 3-month term premium of the adhering to yield curve? a. 2.398% 4. The purchase of which of the following assets is most affected by interemainder rates? a. A house. Movements in the Yield Curve Downloaded by Andrés Rincón () lOMoARcPSD|3175982 SECTION QUIZ 1. What is the primary driver of the left-hand end of the yield curve? a. Central bank interemainder prices. 2. Which yield curve is the majority of most likely linked to a booming economy? a. B 3. The 2 yield curve in the chart are from September 10, 2001 and also from October 10, 2001. What perform you think the Federal Reserve did with interest prices in the month complying with the attacks of September 11, 2001? a. Cut interest rates. 4. Why does the yield curve tend to invert shortly before a recession? a. An inverted yield curve suggests that bond traders are predicting interemainder rate cuts, and interemainder rate cuts take place in response to a recession. Introducing the Stock Market Knowledge Check 1  IPOs incentivize entrepreneurs to innovate as IPOs carry out a method for entrepreneurs to monetize their work-related. SECTION QUIZ 1. Why carry out company manager-owners smile once they ring the stock exadjust bell at their IPO? a. An IPO crystallizes the value of the manager-owners’ stake 2. The Dow Jones Industrial Mean Index has an inexplicable weighting methodology. Unfavor the S & P 500, it is weighted by share price. Here are 22 of the 30 members of the Dow Jones as of mid-June 2015. If all the shares went up by 5%, which share on the display displayed would certainly have the best contribution to an upward activity in the index? a. Goldman Sachs 3. In 1999, James Glassman and also Kevin Hassett publiburned a book dubbed “Dow 36,000.” At the time, the Dow Jones Industrial Average Index was just under 12,000. Which of the complying with is a potential substitute for the book title? a. “The Sum of the Share Prices of All 30 Dow Jones Members Will Triple.” 4. Here is a chart of the index value for the S&P 500 and the United Kingdom’s major equity index, the FTSE 100, from the finish of 2008 to early on 2015. The labels have actually been removed. One index has clearly outpercreated the various other. Over this period, tbelow was a modern technology boom and an oil crash. Here are pie charts reflecting the at an early stage 2015 index compositions by industry for both the S&P 500 and also the FTSE 100. Which index outperformed? a. The S&P 500 Index. The Nature of Equities Knowledge Check 1  Her mortgage payments and also necessities are resolved. Knowledge Check 2  A shareholder in a booming economic situation Knowledge Check 3  170% Knowledge Check 4  200% Downloaded by Andrés Rincón () lOMoARcPSD|3175982 SECTION QUIZ 1. Why are equities volatile? a. Due to the residual nature of income. 2. Which of the following statements is true? a. When you buy an equity, the most you can lose is 100% and also your potential acquire is boundless. 3. In the example highlighting the differences between bond holders and also shareholders, we equated surgeon Jenny to a shareholder. Which row of the budgain planning table mirrors the amount to which she as a shareholder would certainly be entitled? a. D. 4. You however the stock of four consumer items carriers at the end of 2004 and host them until August 2010. Here are the TRA (Total Return) charts from Bloomberg for all four stocks. The “Buy Price” in the optimal left-hand also edge is the price you phelp for each stock. The price of the stock in August 2010 is detailed in the chart’s legfinish. The legfinish likewise says the Dividfinish Adjusted Value in 2010, which is the worth of the stock including reinvested dividends over the holding duration. For which stock did the mass of the total return come from dividends? a. Procter & Gamble. Equity Research Knowledge Check 1  Both are estimated in development by experts. Knowledge Check 2  United Continental Knowledge Check 3  MTU Aero Engines Knowledge Check 4  A compariboy of the commercial prospect of new aircraft models. Knowledge Check 5  Median age of society Knowledge Check 6  China’s Aluminum Demand also Weathers Real-Estate Slowdvery own So Far SECTION QUIZ 1. When an analyst is looking at a agency for the initially time, which of the following 4 activities does he carry out first? a. Defines the sector or markets in which the company opeprices. 2. Here is a table from the Bloomberg Intelligence copper dashboard which mirrors the different end-customers of the “red metal.” Which of the following Bloomberg headlines would certainly most likely be of many interest to a copper trader? a. China’s Construction Slowdown Dents Copper Consumption, Prices 3. Here is a break down of post-it note inventor 3M’s revenue by industry. Which of the complying with industry vehicle drivers need to be of the majority of interest to a prospective investor of 3M? a. The change in postal quantities. Downloaded by Andrés Rincón () lOMoARcPSD|3175982 4. Company kind of X was supposed to have actually income per share of $0.52 for the upcoming quarter. On the day of the results, the company reported income per share of $0.83. What occurred to the share price when the stock industry opened? a. There is not enough information to tell. Absolute Valuation Knowledge Check 1  Coca-Cola because it has a higher market capitalization Knowledge Check 2  $100M Knowledge Check 3  Short-term forecasts Knowledge Check 4  Making the assumptions upon which to job future performance. Knowledge Check 5  Future profits are uncertain Knowledge Check 6  It determines exactly how risky a stock is in comparison to the as a whole stock sector. Knowledge Check 7  $11 Knowledge Check 8  Enterprise Value = Market Cap – Cash + Debt SECTION QUIZ 1. Which of the following stocks is a lot of sensitive to the motion of the as a whole stock market? a. Amazon 2. Which of the following asindications the very same family member weightings to short-term and long-term outcomes as the absolute variation process? a. A fishery exceeding fishing quotas. 3. Here is the WACC function for UNITED STATE drug firm Pfizer. The WACC calculation has actually been concealed. What is the WACC? a. 8.2% 4. A climb in which of the adhering to inputs will boost an absolute variation? a. Earnings Price quotes Relative Valuation Knowledge Check 1  The cash circulation from equities can continue indefinitely while the cash circulation from most bonds concerns an end. Knowledge Check 2  The decline in the P/E proportion even more than counter revenue growth and this pushed the market cap dvery own. Knowledge Check 3  The estimated development can be dramatically wrong. Knowledge Check 4  A stock’s P/E proportion have the right to reprimary over or listed below sector average for extended durations. Downloaded by Andrés Rincón () lOMoARcPSD|3175982 SECTION QUIZ 1. Here is a chart of the NASDAQ Composite, the world’s main technology index. It peaked in the dotcom bubble on March 10, 2000. The P/E proportion later peaked above 500. In hindsight, this is extensively agreed to have actually been a bubble. In March 2015, the index value for the first time given that then exceeded the optimal. Why could some investors at that allude have suggested “this time it’s different”? a. Salaries grew considerably, interpretation that the P/E proportion in early 2015 was just around 30.3x. 2. The World Equity Index attribute shown includes two valuation metrics for the S&P 500. The Nike summary includes the same 2 valuation metrics. How does Nike’s valuation compare to that of the S&P 500? a. Nike is even more expensive than the S&P 500 on both a P/E and also dividfinish yield basis. 3. If the income per share of a agency is $1 and also the revenue yield is 2%, what is the price per share? a. $50.00 4. This chart shows a scatterplot through the x-axis being the approximated sales expansion and also the y-axis being the estimated P/E multiple. Given this data alone, which of the adhering to suppliers may warrant additionally evaluation by a portfolio manager looking to buy an insurance firm for her portfolio? a. Chubb. Downloaded by Andrés Rincón ()