Chapter 1 Flashcards
What do banks do with the money they receive into current accounts?
Banks lend out the money they receive to other individuals who wish to borrow from it
The bank makes a return by charging interest on the loan which covers its cost and generates profit
What is the main purpose of a gilt?
Gilts are one of the best known types of investment which returns the original capital at the end of the term and interest at intervals during it to the individual
They also function as a loan to the Government
Apart from physical assets, what else can be insured?
Earnings
Profit potential
Financial transactions
Which of the following does the Government use to fund its borrowing?
Fixed interest investments and National Savings and Investments
How do you describe gilts?
They pay a fixed level of interest at regular intervals
Who overseas the UK payments system
The bank of England
Which of the following statements regarding bonds is true
Bonds allow companies to raise money without having to borrow it from a bank. It is sourced through private investors and corporations
Where an investment manager establishes and manages portfolio of assets taking all the decisions to meet the investors objectives this is known as?
A discretionary service
The term banassurer is used to describe?
A life office owned by a bank to distribute products via their branches
Which if the following is an example of s global regulatory body
The financial action task force
Capital markets are developed to meet which of the following objectives?
To invest in assets which offer potential for real growth
What is FATF an abbreviation of?
Financial action task force
Reinsurance means?
Assessing and accepting a risk but passing it on for a proportion of the premium
Banks and building societies were developed from the need to?
Provide a safe but accessible place to keep an individuals money
What benefits could a building society member expect in the event of demutulisation
Cash or shares in the new company
