Are We in a Credit Bubble?

Are We in a Credit Bubble?

Assessment

Interactive Video

Business

University

Hard

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The video discusses the challenges of pricing investment grade yields in Europe, especially with negative yields. It highlights the psychological impact on fund managers and the importance of focusing on spreads rather than yields. The role of central bank policies, such as quantitative easing by the ECB and Bank of England, is examined, along with their effects on market complacency. The video also explores potential risks, including inflation and bond market stability, and the future of these markets.

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5 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a significant challenge for fund managers in a world of low or negative yields?

Accepting the psychological aspect of low yields

Finding high-yield investments

Focusing solely on yield rather than spread

Avoiding investments in corporate bonds

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How do central banks influence the credit market according to the discussion?

By selling government bonds

By buying corporate bonds

By increasing interest rates

By reducing inflation

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What was a key factor in credit spread direction in January?

Stock market trends

Currency exchange rates

Oil prices

Interest rates

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a potential risk if central bank policies succeed in creating inflation?

Decreased bond yields

Increased financial stability

Lower corporate bond prices

Challenges in trading fixed income

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is Mario Draghi's approach to tackling low inflation in the Eurozone?

Focusing on government bonds

Increasing interest rates

Buying more assets and being creative

Reducing asset purchases