Chapter 1

Question 1

What is the retail sector

Answer 1

focuses on services provided to personal customer

Question 2

what is the wholesale sector

Answer 2

focuses on services provided to companies and corporations

Question 3

financial activities that make up the retail sector

Answer 3

retail banking
insurance
pensions
investment services
financial planning
financial advice

Question 4

financial activities that make up the wholesale sector

Answer 4

equity
bond
fx
derivatives
insurance
fund management
IB
custodian banking

Question 6

what are bond markets

Answer 6

debt instruments are bought and sold either corporate of government

Question 7

what are FX markets

Answer 7

they facilitate the exchange of one currency for another

Question 8

what are derivatives

Answer 8

a financial contract whose value is dependant on an underlying asset

Question 9

what are insurance markets

Answer 9

the buying and selling of insurance to manage risk

Question 10

what are retail banks

Answer 10

they provide services such as taking deposits from and lending funs to retail customers

Question 11

what are savings institutions

Answer 11

they offer savings products to retail customers but now tend to offer similar services to retail banks

Question 12

what is peer-2-peer lending

Answer 12

financial technology which allows people to lend or borrow from one another without the need for a bank

Question 13

what is crowdfunding

Answer 13

the practice of funding a project or venture by raising small amounts of money from a large number of people

Question 14

what is an investment bank

Answer 14

a bank that provides financial services for corporate and institutional customers, such as investing and raising capital and arranging m&a

Question 15

what are pension funds

Answer 15

large long-term investors in shares, bonds and cash

Question 16

what are insurance companies

Answer 16

the insurance industry provides solutions for much more than the standard areas of life and general insurance cover

Question 17

what is fund managerment

Answer 17

the professional management of investment portfolios for varying institutions and private investors

Question 18

what are stockbrokers

Answer 18

they arrange trades in financial instruments on behalf of their clients

Question 19

what are custodian banks

Answer 19

banks that specialise in safe custody services, looking after portfolios of shares and bonds on behalf of other

Question 20

what are platforms

Answer 20

platforms are online services used by intermediaries, such as independent financial advisors to view and administer there clients portfolios

Question 21

what are third party administrators

Answer 21

they undertake investment administration on behalf of other firms and specialise in this area of the investment industry

Question 22

what is financial planning

Answer 22

a professional service available to individuals, their families, and businesses who need objective assistance in organising their financial affairs

Question 23

what is a financial advisors

Answer 23

professionals who offer advice on financial matters to their clients

Question 24

what is execution only

Answer 24

these services occur when a customer instructs a financial firm to buy or sell a specific investment product without seeking advice before

Question 25

what is robot-advice

Answer 25

the application of technology to the process of providing financial advice, but without the involvement of a financial advisor

Question 26

what is fintech

Answer 26

the use of technology to enhance and deliver superior financial service product offerings

Question 27

what is esg (environmental, social, governance)

Answer 27

a more conscious investor will take into account esg factors