39: Economics & Investment Markets Flashcards
1
Q
Relationship between:
Interest rates &
* GDP growth
* Expected Volatility
A
When interest rates increase…
* GDP growth: increase
* Expected Volatility: increase
2
Q
Which has more volatile earnings?
Durable goods vs non-durable goods
A
Durable goods, due to shifts in economic cycle-related demand
3
Q
Corporate profitability is a ___ indicator:
A
leading
Improvements in profitability are evident before a recovery is underway
4
Q
In times of narrowing spreads, lower rated more economically sensitive corporate bonds tend to outperform:
A
higher rated bonds in stable industires
Airline industry outperforms Consumer staples industry
