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Home>Courses>Fundamental Analysis for Traders>Lesson 7 of 9

Inflation and prices

What inflation is, and why traders react to every reading.

Fundamental Analysis for Traders·Lesson 7 of 9

All lessons

By the end of this lesson you'll be able to:

  • 01Define inflation
  • 02Explain how inflation affects rates and currencies
  • 03Describe why markets watch CPI
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is Inflation and How Does It Drive Financial Markets?
Key terms
InflationCPIInterest RateDeflation

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What is inflation?

  2. Question 02

    Inflation is usually tracked by which index?

  3. Question 03

    What is a sustained fall in the general price level called?

  4. Question 04

    What does rising inflation usually push central banks to do?

  5. Question 05

    What does higher interest rates tend to do?

  6. Question 06

    Why do higher rates make a currency more attractive to hold?

  7. Question 07

    Inflation rises but comes in below the forecast. What may rate-hike expectations do?

  8. Question 08

    Why can price move opposite to a rising inflation number?

  9. Question 09

    CPI is due in five minutes and you hold a tight-stop trade. What is a prudent move?

  10. Question 10

    Why is CPI closely watched?

Answered 0 of 10 · pass 70% (7/10) to complete

Fundamental Analysis for Traders7 of 9
  1. Fundamental analysis basics
  2. EPS and the P/E ratio
  3. Key financial ratios
  4. Reading a balance sheet and cash flow
  5. Profitability: margins and EBITDA
  6. Dividends and yield
  7. →Inflation and prices
  8. Central banks and interest rates
  9. GDP, jobs, and the economy
  10. ⚑Final Assessment· 20 Q