Bloomberg Market Concepts or BMC
Bloomberg Market Concepts examination is a self-paced online course aimed at introducing the fundamentals of finance to aspiring finance professionals. There have been many courses and online as well as contact programs that are designed to make students and entry-level professionals acquainted with the basic principles of finance and make them better equipped to deal with professional challenges in the field of finance.
This course is offered by the Bloomberg Institute, a globally acknowledged institution engaged in disseminating information on various financial domains and helping professionals develop their skills and capabilities in the desired manner. Bloomberg Market Concepts is more of a specialized online course that focuses primarily on market concepts, as the name suggests, and is best suited for anyone willing to develop a market-oriented career.
In the course of this article, we would elaborate on the outline, structure, and contents of this course, along with discussing potential benefits for the participants.
- What Bloomberg Market Concepts?
- Bloomberg Market Concept E-Learning Format
- Why is Real-World Case Studies Utilized in BMC?
- Bloomberg Market Concepts Examination Course Modules
- Bloomberg Market Concept – Course Fee
- Benefits of this BMC Course
- Bloomberg Market Concept – Sample Certificate
What Bloomberg Market Concepts?
- Bloomberg Market Concept is a fast-paced e-learning course by Bloomberg that can be completed within a week, and the participants are awarded a certificate of completion at the end of the time.
- This course primarily includes 8 hours of video tutorials that utilize Bloomberg data, indices, analytics, and news stories to impart market essentials to the participants.
- The course material is divided into 4 modules dedicated to specific market sectors, and participants are presented with 120 assessment questions throughout the modules.
- Another major attraction of the course is that it introduces participants to the Bloomberg Terminal, which is often employed by financial services firms for displaying, reading, and interpreting financial data of various types.
Bloomberg Market Concept E-Learning Format
What makes this course so popular and easy to administer is the kind of flexibility it offers. One can take it up and complete it through a Bloomberg Terminal at the university campus, do it along with multitasking at work or take time to complete the course at home. However, it is strongly recommended not to take the procedure lightly and devote enough time to go through the contents and master them to take full advantage in terms of acquiring useful knowledge, skills, and capabilities.
You should have access to flash to be able to view the online content. It would be best to utilize a PC or laptop for the purpose instead of relying on a tablet or smartphone. The learning material in the form of videos is also not typical because a person writes on the blackboard and explains the concepts. Instead, case studies, Bloomberg data, analytics, indices, and news stories are utilized to present the ideas and their application interestingly. Pimm Fox and Monica Bertran of Bloomberg Institute act as video narrators to make it easier for participants to understand the content better and grasp the concepts without much difficulty.
Why is Real-World Case Studies Utilized in BMC?
One might wonder why Bloomberg has relied on real-world case studies to illustrate the concepts presented in this course. One of the primary reasons has been perhaps to make it more engaging and relevant to the participants. When they study significant real-life events like the Great Depression, Bretton-Woods, and the more recent global meltdown, memorizing the concepts becomes that much easier in that context. Additionally, the knowledge of real-world scenarios can be of great help to participants while appearing for interviews.
Bloomberg Market Concepts Examination Course Modules
source: Bloomberg Institute
BMC consists of 4 primary modules:
- Economic IndicatorsEconomic IndicatorsSome economic indicators are GDP, Exchange Rate Stability, Risk Premiums, Crude Oil Prices etc.
- Fixed Income
To a beginner, gaining an insight into these market sectors can be immensely helpful and rewarding. However, it should not be considered a comprehensive treatment of any of these sectors in any case. The course content is more or less introductory, with just enough information presented with real-world illustrations and graphics, which would help them get going without much effort.
This course also serves to introduce participants to the Bloomberg Terminal, which is commonly employed by financial services firms. Along with the course contents, participants would be introduced to new Bloomberg Terminal functions at every step, helping retrieve, display, read, and interpret data on the terminal. It offers a kind of limited practical exposure to Bloomberg Terminal, which can come in handy later.
Each of these modules consists of several sub-modules, and the participants are expected to acquire knowledge of at least one sub-module per sitting. Next, we would provide a brief overview of each of the primary modules to give readers an idea of what they would learn from the course.
BMC Module I: Economic Indicators
source: Bloomberg Institute
- This module helps understand the significance of primary economic indicators and how they are used by investors to get an idea of the health of the economy.
- Helps them understand the format in which economic indicators are published and how they can be analyzed
- Acquire an understanding of good economic indicators.
- Techniques to study economic indicators
Economic Indicators is divided into three sub-modules, namely:
- The Primary of GDP
- Monitoring GDP
- Forecasting GDP
A brief outline of each of the sub-modules would also be appropriate here:
#1 – The Primary of GDP
Real GDPReal GDPReal GDP can be described as an inflation-adjusted measure that reflects the value of services and goods produced in a single year by an economy, expressed in the prices of the base year, and is also known as "constant dollar GDP" or "inflation corrected GDP." growth serves as an economic indicator of crucial significance for investors, which clearly shows the current economic growth and prospects of future growth. Since GDP growth is cyclical, it helps investors get an idea of where the economy stands in this cyclical growth.
#2 – Monitoring GDP
Despite its apparent significance, GDP figures represent the state of the economy as it was some time ago, instead of its current status. This is primarily because GDP figures are calculated every quarter, and it takes a while for authorities to come up with the exact model and announce it publicly. Instead, monthly indicators, including PMI and nonfarm payrolls, which are quickly reported, attract wider attention amongst investors. These are also usually closely tied with GDP and can have a significant impact.
#3- Forecasting GDP
Analysts often publish the likelihood of the performance of economic indicators. Though not precisely in its nature, these estimates are often based on simulated economic models, which provide a general overview of how the economy is likely to perform shortly. Investors try to assess the mood of the economy based on how pessimistic or optimistic are prevailing indicators plus the future assessments of leading experts. This helps them identify possible inflection points and base critical economic decisions on them.
Bloomberg Terminal Functions for Module I
BMC Module II: Currencies
source: Bloomberg Institute
- Provides an inside view of the history of currency marketsCurrency MarketsFor those wishing to invest in currencies, the currency market is a one-stop solution. In the currency market different currencies are bought and sold by participants operating in various jurisdictions across the world. It is important in international trade and is also known as Forex or Foreign Exchange. and how they perform
- Helps identify specific vital points which might drive the currency evaluation
- The role played by banks and the banking sector at sizeable ineffective management of inflation and deflationDeflationDeflation is defined as an economic condition whereby the prices of goods and services go down constantly with the inflation rate turning negative. The situation generally emerges from the contraction of the money supply in the economy. at their very source.
- Aimed at developing an understanding of the role of currency markets in influencing the fortunes of businesses and investors and what they can do to avoid currency-related risks
#1 – Currency Market Mechanics
This sub-module introduces participants to the complex mechanics of currency markets and how several currencies are interlinked to allow for FX trades to take place. Earlier, any currency was solely pegged to the US Dollar for the kind of stability and liquidity it offers. In turn, the US Dollar was locked to gold at a specific price. However, since 1971, the gold conversion window for the US dollar was suspended, and the whole process has undergone a sea-change as many currencies have been free-floating. These currencies float in a matrix of pairs which are valued through a process known as triangular arbitrage. Even so, nearly 85% of all currency trades still involve USD and are often employed as a significant currency to convert two less liquid currencies.
#2 – Currency Valuation
This section helps understand the intricacies of currency valuation and how they help the currency market perform efficiently. As we have pointed out, the direct link between paper currencies and gold was broken down in 1971. All currency valuations are quoted purely as relative to other currencies. It has to be understood that in the long-run all goods and services should cost almost the same, irrespective of the location. However, in the short-run, which is of interest to investors, these are influenced by three leading factors.
- Sudden changes in interest rates
- Sudden changes in inflation
- sudden changes in quantities of trade
This is because all other things being equal, currencies with higher interest rates, lower inflation, and higher net exportsNet ExportsNet exports of any country are measured by calculating the value of goods or services exported by the home country minus the value of the goods or services imported by the home country. It includes various goods and services exported and imported by the government, like machinery, cars, consumer goods. tend to be attractive.
#3 – Central Banks and Currencies
This sub-module deals with the role of central banks in managing national currencies. Participants learn how central banks regulate short-term interest rates, which can influence currency valuation. In developed economies, commonly, a goal of 2% inflation is targeted to control the risk of inflation and deflation. Latter can be harmful as well, since it leads to people losing interest in purchasing, affecting economic activity and growth.
#4 – Currency Risk
Nearly any businesses or investors involved in cross-border monetary transactions can be affected by currency movements. To understand currency risk, both historical volatility and currency rate forecasts are considered. It explains how forward agreements can be entered into by such investors and businesses to minimize or avoid the risk of currency-related losses.
Bloomberg Terminal Functions for Module 2
BMC Module III: Fixed Income
source: Bloomberg Institute
- This section is dedicated to developing an understanding of how the history and dynamics of the bond market and how it became the biggest and most complex market in the world.
- How yields facilitate comparison across a diverse and complex bond market.
- Participants would learn about how central banks decide interest rates.
- How to bond valuation is driven by interest rates and certain key factors, including creditworthiness and inflation.
The Roots of the Bond Market:
This section introduces fixed income instruments and explains how it represents loan agreements where the borrower promises to pay fixed, pre-agreed repayments at a specific future date. Governments often issue bonds to secure public loans for various purposes, which are secure and offer a higher level of liquidity. To compare the income from bonds, investors look for their respective yields.
Bond Valuation Drivers:
This section helps understand how bonds are valued, compared, and what fears and considerations influence investor decisions.
Central Bankers & Interest Rates:
This section deals with how bankers and their regulatory measures to keep interested rates in check, which has a decided impact on the bond market. Central banks usually keep an eye on the current level of inflation and deflation along with regulating interest rates and trying to understand where investors think the interest rates are headed.
The Yield Curve & Why it Matters:
This section explains what the yield curve isWhat The Yield Curve IsA yield curve is a plot of bond yields of a particular issuer on the vertical axis (Y-axis) against various tenors/maturities on the horizontal axis (X-axis). The slope of the yield curve provides an estimate of expected interest rate fluctuations in the future and the level of economic activity. and how it affects bond markets. The yield curve depicts the cost of borrowing for various periods. It is described how, when businesses or individuals borrow, the interest rates on loans are decided concerning the government borrowing rate.
Movements in the Yield Curve:
This section deals with movements in the yield curve and what they mean for individuals, businesses, and governments. The left-hand end of the turn is based on the interest rates set by the central bank and is more or less fixed. However, the right-hand end of the curve represents the belief of investors about where will interest rates go. Participants would learn how to interpret the yield curve and study the intricacies of the bond market.
Also, see Bond PricingBond PricingThe bond pricing formula calculates the present value of the probable future cash flows, which include coupon payments and the par value, which is the redemption amount at maturity. The yield to maturity (YTM) refers to the rate of interest used to discount future cash flows.
Bloomberg Terminal Functions for Module 3
BMC Module IV: Equities
source: Bloomberg Institute
- This section would introduce participants to the fundamentals of equity markets and how they perform.
- This includes calculating equity index performance from the performance of specific stocks.
- It understands how and why equities are more volatile than bonds and why equity ownership is such an attractive proposition.
- Explain how industry and supply chain analysis plays a crucial role in equity researchEquity ResearchEquity Research refers to the study of a business, i.e., analyzing a company's financials, performing Ratio Analysis, Financial forecasting in Excel (Financial Modeling), & exploring scenarios to make insightful BUY/HOLD/SELL stock investment recommendations. Moreover, the Equity Research Analysts discuss their findings & details in the Equity Research Reports.
- Elaborates on three types of relative valuation and the role of future earnings growth in assessing real value.
Introducing the Stock Market
This section explains how companies list themselves on the stock exchangeThemselves On The Stock ExchangeStock exchange refers to a market that facilitates the buying and selling of listed securities such as public company stocks, exchange-traded funds, debt instruments, options, etc., as per the standard regulations and guidelines—for instance, NYSE and NASDAQ. through IPOs to raise money or to be able to sell their stakes. Companies may also be delisted if they are acquired, go bankrupt, or have financial mismanagement, among other reasons. How investors follow the stock market through indices that track some selected stocks influences investor decisions strongly.
The Nature of Equities
This section delves into the nature of equities. It explains how equities are more volatile than bonds since they do not have any fixed income repayments, and their growth depends on the performance of the company. Equity owners can benefit in two ways if the company does well, and stock prices go up and in the form of dividend payments.
This section deals with the complicated subject of equity research, which involves industry-level analysis before going on to study various financial projectionsVarious Financial ProjectionsFinancial projection is a statistical forecast of a company's future revenue and expenditure based on historical market patterns, internal factors, data interpretation, anticipated market developments, and experiences. To meet production or sales targets, both short-term and long-term financial estimates are sometimes evaluated., revenues, costs, earnings to be able to identify suitable stocks for investments. (Also, check out Financial Modeling Course)
It explains how what role fundamental valuation plays in equity market investments. Total valuation ValuationThe term "absolute valuation" refers to a method of business valuation that uses DCF analysis to determine the firm's fair value based on its projected cash flows. tends to look for short-term tangible gains over long-term probabilistic gains, which could be hard to rely on. It offers an exciting perspective on valuing stocks and deriving their value based on the more immediate performance of the company.
Relative valuation, more on comparing the company’s current to its historical valuation, leads to somewhat subjective and intuitive results than objective ones. This is derived by multiplying the estimated earnings per shareEarnings Per ShareEarnings Per Share (EPS) is a key financial metric that investors use to assess a company's performance and profitability before investing. It is calculated by dividing total earnings or total net income by the total number of outstanding shares. The higher the earnings per share (EPS), the more profitable the company is. with what investors consider a fair P/E ratioP/E RatioThe price to earnings (PE) ratio measures the relative value of the corporate stocks, i.e., whether it is undervalued or overvalued. It is calculated as the proportion of the current price per share to the earnings per share. .
Also, checkout Price to Book ValuePrice To Book ValuePrice to Book Value Ratio or P/B Ratio helps to identify stock opportunities in Financial companies, especially banks, and is used with other valuation tools like PE Ratio, PCF, EV/EBITDA. Price to Book Value Ratio = Price Per Share / Book Value Per Share ,
Bloomberg Terminal Functions for Module 4
Bloomberg Market Concept – Course Fee
- For students, this online course costs only $149 USD, whereas, for professionals, it would cost $249 USD.
- Ideally, it takes around 8-12 hours to complete the course, and it is recommended to dedicate enough time to understand the contents properly.
Benefits of this BMC Course
- Gaining Familiarity with Key Market Concepts
- Becoming well acquainted with the financial language employed in the industry
- Learning with the help of real-world case studies to gain a practical understanding
- Understanding key industry benchmarks for professionals
- Mastering more than 70 Bloomberg Terminal functions to become industry-ready
- Receiving a certificate of completion at the end of the course
Bloomberg Market Concept – Sample Certificate
Below is the sample certificate that you get after completing the Bloomberg Market Concept examination.
source: Bloomberg Institute
Bloomberg Market Concept is a fast-paced e-learning course by Bloomberg that provides you with the flexibility to take this exam as and when you desire. This exam provides you with a real-life case study based learning in Equities, Currencies, Fixed Income, and Economics. Additionally, it teaches you with Bloomberg Terminal Functions necessary for the hands-on jobs in Investment BankingJobs In Investment BankingThe entry-level investment banking jobs for graduates mainly belong to categories such as markets, specialist markets, investment management, corporate banking, risk management, structured finance, technology, operations, private wealth management., Equity Research, and more.
It is strongly recommended not to take the course lightly and devote enough time to go through the contents and master them to take full advantage in terms of acquiring absolute Valuation Formulas, useful knowledge, skills, and capabilities.