All definitions Flashcards
INFLATION:
A sustained increase in the general level of prices of goods and services
LIQUIDITY:
Assets (eg cash ) that can be quickly made available to meet an institution’s liabilities without affecting the market price of those assets. (The ease with wh an asset can be converted to cash)
INTERBANK MARKET:
A very large market which recycles excess cash held by banks, either directly between banks or more usually through specialist brokers
RECESSION:
A significant decline in economic activity over a sustained period - technically over two consecutive quarters of -ve economic gr as measured by a country’s GDP
GROSS DOMESTIC PRODUCT:
GDP is a measure of a country’s overall economic activity (Technically it is the value of all the goods and services produced within the country within a given period eg a year)
MONETARY POLICY:
Measures taken to control the supply of money in the economy to manage inflation.
FISCAL POLICY:
The adjustment of levels of taxation and public spending in a a way that is intended to achieve the government’s economic objectives.
DISINFLATION:
A fall in the rate of inflation i e the prices are still rising but less quickly than they were.
DEFLATION:
A general fall in the price of goods and services. In other words the inflation rate is below zero per cent - a negative inflation rate
SECURITIES:
Financial assets that can be traded.
They can represent 1) ownership (equities)
2) debt (gilts and corporate bonds)
DIVIDEND:
A company’s profits distributed to shareholders -
the level of dividend dep on profitability of company plus the strategic decisions such as reinvestment of profits for expansion of business
NET ASSET VALUE:
Total value of investment fund divided by the number of shares issued
GEARING:
The level of debt as a percentage of a company’s equity. (It measures the extent to which a company’s operations are funded by borrowing rather then by shareholder capital)
ANNUITY:
A financial product purchased with a lump sum, which then pays out a regular income, potentially for the lifetime of the annuity holder.
DEFERRED PERIOD
The period that must elapse between the onset of the illness/injury that gives rise to the claim and the first payment of benefits.
PERSONAL PENSION:
A pension product arranged on an indi basis (i e rather than a pension scheme run by an employer). The ben eventually recd dep on the performance of the funds into which the indi’s contributions are invested.
STAKEHOLDER PENSION:
A simple, low-cost pension product that meets govt std pn charges and levels of contribution
LOAN TO VALUE:
The amount of the loan in reln to the value of the asset used for security, expressed as a percentage.
REALTY:
Property is deemed real if a court will restore it to the dispossessed owner and not merely provide compensation for loss. Tends to be immoveable eg land and what is attached to it…in other words real estate
PERSONALTY:
All other property that is not real
LEGAL PERSON:
Is a body that has a legal existence and can therefore into into legal contracts, can sue and be sued in a court of law. eg an indiv, a company etc
REGULATION:
Body of rules created by various regulatory bodies, to which the financial services industry must adhere.
SUPERVISION:
The range of acti undertaken by regulators to ensure that participants adhere to regulatory requirements
CAPITAL ADEQUACY:
Ensuring that a business holds sufficient reserves of capital to ensure it is sustainable
SOLVENCY:
The extent to wh a busi’s assets exceed its liabilities
E.g. For mortg lenders, assets are loans made to consumers and liabilities are funds borrowed to facilitate the loans - from deposits or money markets
SOLVENCY RATIO:
Capital as a percentage of risk-adjusted value of assets
‘EXECUTION-ONLY’ BUSINESS
A transaction executed upon a client’s specific instruction, where the firm gives no advice and rules on assessing appropriateness do not apply.
