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Capital Market > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

It refers to the whole gamut of market dealings with financial assets

A

Financial system

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2
Q

It is where the lenders and borrowers of funds need to finance their needs and satisfy their objectives

A

Financial system

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3
Q

Lenders and borrowers can be

A

Individuals businesses institutions and even the government

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4
Q

This can be individuals businesses institutions and even the government

A

Lenders and borrowers

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5
Q

They have available capital through savings and accumulated wealth and are willing to lend their capital for a fee

A

Lenders

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6
Q

They are willing to pay a fee for the use of capital to support their financing means

A

Borrowers

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7
Q

It brings together the borrowers and lenders of funds

A

Intermediation process

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8
Q

It is the most common form of financial intermediation in the financial system

A

Banking system

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9
Q

Lenders and borrowers in the financial system can be

A

Households firms government non-residents

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10
Q

These are also part of the services provided by the financial intermediaries

A

Risk management liquidity and information dissemination

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11
Q

Components of banking institutions

A

Universal banks
commercial banks
thrift banks
rural banks
specialized government banks

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12
Q

Components of non bank financial intermediaries

A

Investment houses
financing companies
securities dealers or brokers
investment companies
insurance companies
lending investors
pawnshops
government non-bank financial institutions

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13
Q

Components of non bank thrift institutions

A

Mutual building and loan associations
non-stock savings and loan

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14
Q

It is responsible for implementing the monetary policy and regulation of the banking system

A

Bangko sentral ng pilipinas

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15
Q

It supervises the operations of the insurance companies

A

Insurance commission

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16
Q

It works with the bsp and ic in supervising and regulating the activities of the financial institutions in the country

A

Securities and exchange commission

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17
Q

They are expanded commercial banks capitalized at 5 million or more

A

Universal banks

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18
Q

They are banks with a minimum capitalization of 2.8 billion

A

Commercial banks

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19
Q

They are banks with a minimum capitalization of 325 million for those whose head office is within metro manila and 25 million otherwise

A

thrift or savings bank

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20
Q

They are normally operating and the sector with minimum capitalization of 3.2 million for those in the fifth and sixth class municipality is but those in metro manila need a minimum capitalization of 32 million

A

Rural banks

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21
Q

These are government owned and controlled corporations engage and specialized lending program for economic development

A

Specialized government banks

22
Q

They are involved in underwriting of securities financial consultancy among others and have a minimum capital requirement of 300 million

A

Investment houses

23
Q

they lend to business firms and individuals using equity capital and long-term borrowed funds with minimum capital ranging from 2.5 million to 10 million depending on domicile

A

Financing companies

24
Q

They sell its own securities to the public and invest the proceeds in stocks and bonds

A

Investment companies

25
Q

They are engage in property liability life insurance and or multiple line products

A

Insurance companies

26
Q

They are involved in the buying and selling of securities and have a minimum capital of 30 million

A

Securities dealers or brokers

27
Q

Cater to the financial requirements of smaller firms or individuals

A

Lending investors

28
Q

They provide immediate cash relief to the individual customers but charge higher rates than most banks and they are capitalized the minimum of 100,000

A

Pawnshops

29
Q

These are companies catering to a niche market

A

Mutual building and loan associations and non-stock and loans associations

30
Q

The four major markets of the financial system

A

Money market capital market foreign exchange market derivatives market

31
Q

It is a segment of the financial market with dealings and short-term maturities of financial contracts

A

Money market

32
Q

Financial instruments with maturities of less than one year are included in this market

A

Money market

33
Q

Examples of money market

A

Treasury bills and short-term commercial papers

34
Q

This market are fixed income debt instruments

A

Money market

35
Q

Is a segment of the financial market with dealings in maturities beyond one year

A

Capital market

36
Q

Examples of capital market

A

Government bonds long-term commercial papers corporate bonds of private companies

37
Q

Types of capital market

A

Primary market secondary market

38
Q

The form of financial instruments that can be traded in the capital market

A

Debt versus equity

39
Q

It refers to the issuance of new securities representing an actual transfer of funds from the investor to the issuing entity commonly called the initial public offering

A

Primary markets

40
Q

It refers to the trading of securities providing a liquidity mechanism and the market for investors

A

Secondary market

41
Q

The secondary market can be an

A

Organized market or over-the-counter market

42
Q

It is a financial obligation that has to be repaid with interest

A

debt

43
Q

It is a form of ownership in an enterprise and does not have to be repaid

A

Equity

44
Q

These are debts of private corporations which carry interest repayments

A

Commercial papers

45
Q

It refers to the market dealing in a foreign currencies like yen us dollar and other major currencies

A

Foreign exchange market

46
Q

In our country most of the trading in foreign currencies is done using the

A

Philippine dealing system

47
Q

It is an organized secondary market where the buying and selling clients of the bankers association of the philippines meet and where transactions or map or recorded

A

Philippine dealing system

48
Q

It includes all financial contracts deriving its value form any other underlying assets

A

Derivatives

49
Q

Example of underlying assets

A

Security prices commodity prices interest rates and foreign exchange rates

50
Q

The basic classes of derivatives

A

Futures options swaps and forward rate contracts

51
Q

This provide a risk management tool in the financial system

A

Capital Market (3 decks)

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