Financial Analysis

USD.

b. It had no significant effect on emerging market currencies.

c. It resulted in lower volatility across the board.

d. It caused a depreciation of emerging market currencies due to capital

outflows.

14.Why did an increase in U.S. Treasury yields have a negative effect

on emerging market (EM) hard currency bonds?

a. Higher U.S. yields made EM bonds relatively less attractive.

b. It narrowed Ems in their local currencies.

c. It increased investors’ risk appetite.

d. Higher yields indicated a stronger U.S. economy relative to Ems.

FINANCIAL MARKET REVIEW 2014-2019

1. What technological advancements contributed to the United States

becoming the largest oil producer worldwide by Summer 2018?

a. Solar energy and wind turbines.

b. Nuclear energy advancements.

c. Fracking and horizontal drilling.

2. How did China’s exchange rate policy evolve from 1994 through

the period leading up to 2019?

a. China maintained a strict peg to the US dollar throughout the period.

b. China allowed a gradual appreciation and started adopting a dirty

float.

c. China fully liberalized its exchange rate.

3. What was a major factor in the global growth slowdown after

2013? (The problem is in China)

a. Increased global investment in technology.

b. Slowdown in China, transitioning to a consumption driven economy.

c. Rapid industrialization in emerging markets.

4. What was a consequence of Chinese yuan’s depreciation?

a. Boosted China’s exports significantly.

b. Indicated robust economic growth.

c. Was seen as a response to slowing economic growth.

5. How does a country’s trade balance affect its net foreign assets

(NFA)?

a. A trade surplus (Export > Import) increases NFA.

b. A trade deficit (Export < Import) has no impact on NFA.

c. A trade surplus decreases NFA due to increased domestic spending.

6. Why did China’s central bank accumulate significant net foreign

assets while the yuan was pegged?

a. To decrease the value of the yuan and reduce exports.

b. To maintain the yuan’s peg to the dollar, buy purchasing foreign

currency.

c. Accumulation was a result of high domestic interest rate.

7. What was a primary reason for the vulnerability of Italian banks

during the second wave of risk aversion in early 2016?

a. High levels of equity investments in technology startups

b. High levels of non-performing loans (NPLs) on their balance sheets

c. Excessive exposure to the US mortgage market

8. What is the likely consequence if a country’s exchange rate is

overvalued, and the central bank maintains the peg?

a. It will lead to an increase in exports due to cheaper domestic goods.

b. It may cause a depletion of foreign reserves as the bank defends the

peg.

c. The exchange rate will correct itself without intervention.

9. Why did the accumulation of net foreign assets (NFA) by China’s

central bank slow down after reducing currency intervention?

a. China shifted towards a floating exchange rate system (less

intervention).

b. The accumulation continued at the same pace.

c. China began to experience trade deficits.

10.What was the global economic trend in early 2016?

a. Rapid inflation.

b. Recovery underway.

c. Recession deepening.

11.Which region’s manufacturing sector were an exception to the

global resiliency in early 2016?

a. United States.

b. Eurozone.

c. China.

12.What action did the ECB take to combat deflationary pressures?

a. Cut interest rates to zero.

b. Raised interest rates.

c. Increased government spending.

13.What type of “experimental” money policy did the BOJ implement

in 2016?

a. Negative rates and yield curve control.

b. Reverse-quantitative easing.

c. Currency devaluation.

15.What types of assets did the BOJ purchase as part of its monetary

policy?

a. Only government bonds.

b. Equity index funds, REITs and corporate bonds.

c. Only gold reserves.

16.What significant political event occurred in the United Kingdom on

June 23, 2016?

a. General elections

b. Brexit referendum

c. Signing of a new trade deal with the EU

17.What was the market’s reaction to fears of restrictive monetary

policy by the Fed in 2018?

a. A brief, sharp correction.

b. No significant change.

c. A prolonged bear market.

18.What policy did the Federal Reserve continue despite criticism?)

a. Quantitative Easing

b. Interest rate cute

c. Hiking cycle (increase rates)

19.What factors led to a change in the Federal Reserve’s direction in

policy?

a. Manufacturing slowdown, subdued inflation, political pressure.

b. High inflation and low unemployment.

c. Increase in government spending.

20.Why did the USA begin a trade war against China in 2018?

a. China’s policies created an unfair advantage for Chinese companies.

b. Because of a dispute over the south China sea.

c. Due to disagreements in climate change policies.

21.What were the main accusations by the United States against

China?

a. Excessive borrowing from international financial institutions.

b. Unfair trade practices, including forced technology transfers and IP

theft.

c. Lack of investment in renewable energy.

22.What action did the United States take ahead of negotiations with

China?

a. They removed all tariffs on Chinese imports.

b. They increased tariffs on imports of goods from China.

c. They signed a free trade agreement with China.

23.What did the Phase One trade deal include?

a. An agreement for China to purchase $200 billions of US imports.

b. A mutual decision to end all tariffs.

c. A commitment from the US to join the Belt and Road Initiative.

24.Which U.S. stock index significantly outperformed due to the rise

of tech giants by 2019?

a. Dow Jones Industrial Average

b. Nasdaq 100

c. New York Stock Exchange

d. Russell 2000

25.How many serious (10-20%) corrections did equity indices

experience from 2009 to 2019?

a. About 5-6

b. About 50-60

c. About 500-600

26.What percentage of the global investable equity opportunity set

does the MSCI ACWI cover?

a. 25%

b. 85%

c. 100%

27.Which region significantly outperformed others since the bottoms

of the financial crisis of 2008?

a. North America

b. Europe

c. Emerging Markets

d. Asia Pacific

28.Why did the S&P 500 stock index seemingly underperform the

MSCI NA equity index?

a. Lack of tech stocks.

b. It did not when considering dividends.

c. Poor market conditions.

29.From 2014 onwards, which cap stocks outperformed the others?

a. Small caps

b. Mid caps

c. Large caps

30.Which cap stocks have the highest historical premium attached?

a. Small caps

b. Mid caps

c. Large caps

31.According to the Fama-French 3-Factor Portfolios, tech stocks are

typically considered what type of stocks?

a. Value stocks

b. Growth stocks

c. Dividend stocks

FINANCIAL MARKET REVIEW 2020-2024

1. What was a key reason for Treasuries outperforming Gilt and Euro

Sovereigns during the COVID-19 pandemic?

a. Treasuries had a higher yield.

b. The Fed had more room to maneuver, allowing for greater rate

reductions.

c. European bonds, except for Germany, offered higher interest rates.

d. Treasuries were less affected by the pandemic.

2. Why did gold and the Japanese Yen (JPY) typically increase in value

during the risk aversion phase of the COVID-19 pandemic?

a. Due to their status as "safe haven" assets. (Gold against dollar, in the

short time is A, in long term is D)

b. Because of the decrease in global stock markets.

c. They were less impacted by the Federal Reserve's policies.

d. There was an inverse correlation between gold and the dollar.

3. Which factor contributed to the stock market rewarding mega-cap

tech companies as true winners during the COVID-19 crisis?

a. A decrease in technology stock values.

b. The impact of fiscal policies on small businesses.

c. Shift towards remote work and digital services.

d. Lower interest rates globally.

4. On April 20, 2020, why did crude oil producers offer to pay to

dispose of their oil?

a. There was an unexpected surge in oil prices.

b. There was a global surplus of renewable energy.

c. Excess supply and non-existent demand due to lockdowns.

d. International sanctions on oil-exporting countries.

5. What major factor contributed to the positive narrative around

Bitcoin and crypto assets during the COVID-19 pandemic?

a. The rapid adoption of blockchain technology in developing countries.

b. The loss of purchasing power of fiat currencies due to monetary

stimulus measures.

c. A decrease in the global demand for digital currencies.

d. The introduction of new regulations favoring traditional banking

systems.

6. What characterizes Bitcoin's supply, making it attractive as an

asset?

a. Its unlimited supply, ensuring liquidity.

b. The annual increase in Bitcoin supply by 10%.

c. Its capped supply of 21 million coins, making it a hard currency.

d. The ability of governments to regulate and influence its supply.

7. Which sector saw a boom in total value locked (TVL), showcasing

blockchain’s potential to revolutionize finance?

a. Automated Market Makers (AMMs)

b. Decentralized finance (DeFi)

c. Non-fungible tokens (NFTs)

d. Liquidity pools (LPs)

8. What was a key driver behind the NFT craze?

a. The promise of high returns from traditional art investments.

b. The fungibility and easy exchangeability of NFTs.

c. The uniqueness and ability to verify ownership of digital assets.

d. Decreased interest in digital art and collectibles.

9. Which of the following is not a characteristic feature of Web 3.0?

a. Highly interactive social media platforms.

b. Decentralization, with users having control over their data.

c. Support for decentralized applications (dApps).

d. Enhanced data privacy and security measures.

10.Considering the global inflation surge of mid-2021, which factor did

not directly contribute to this phenomenon?

a. Central banks' unprecedented monetary easing policies.

b. A deliberate decrease in global oil production.

c. Pandemic-induced supply chain disruptions.

d. Stimulus measures increasing consumer spending.

11.Which of the following best encapsulates the economists' dilemma

in categorizing the post-pandemic inflationary pressures?

a. Predicting the exact duration of supply chain disruptions.

b. Differentiating between cyclical and structural inflation drivers.

c. The challenge in balancing stimulus measures with inflation control.

d. Assessing the transitory versus persistent nature of inflationary

pressures.

12.The World Bank's report on commodity shocks in April 2022

underscored what overlooked aspect of the global economic

recovery?

a. The resilience of global supply chains.

b. The underesti