C7 - Investing Surplus Funds Flashcards
1
Q
The 3 factors that investors are interested in for surplus funds
A
- Risks - is the surplus funds safe?
- Return - high or low return on the investment
- Liquidity - the ability to turn into cash immediately
2
Q
What is the interbank market?
A
Short term deposits placed by banks with each other.
3
Q
What are call account deposits?
A
Funds invested into a bank but with immediate withdrawal.
4
Q
What are fixed term deposits?
A
Money invested into a bank which will mature over a period of time and will also gain a higher interest rate for the longer the period
5
Q
what are notice deposits?
A
When money is invested and can be withdrawn when advance notice is given. The longer the notice period, the higher the interest.
6
Q
How are equity shares paid
A
Dividends to shareholders
7
Q
How are preference shares paid out?
A
Fixed interest rate
