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Capital Market > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

The available philippine money market instruments

A

Treasury bills
Small investors program bills
Cash management bills
reverse repurchase agreements
short-term commercial papers
bankers acceptance
promissory notes

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2
Q

These are domestic government death issued regularly to finance the national government need for capital

A

treasury bills

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3
Q

These are used as a monetary tool to control liquidity

A

treasury bills

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4
Q

These are also used for reserve requirements, collateral and as a benchmark for setting rates

A

treasury bills

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5
Q

This or another form of government debt issued and launched in the late 1990s to attract retail investors

A

Small investors program bills

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6
Q

This instruments have similar characteristics as the regular auctioned instruments but issued and smaller denominations

A

Small investors program bills

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7
Q

These are short-term debt notes used in times of tight liquidity and interest rate volatility allowing the government to meet its funding requirements as it stabilizes the interest rate condition of the market

A

Cash management bills

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8
Q

This are non-tradable overnight placements in the interbank call loan market as a short-term outlet for excess liquidity of banks

A

Reverse repurchase agreements

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9
Q

This is the bangko sentral ng pilipinas principal tool in its open market operations to control liquidity in the financial system

A

Reverse repurchase agreements

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10
Q

These are unsecured debt instruments issued by resident corporations which state the terms and conditions of the borrowing

A

Short term commercial papers,

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11
Q

These are short term debt obligations issued by large commercial banks

A

Bankers acceptance

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12
Q

These are issued by a number of financial institutions and the popular time deposit products offered by most banks

A

Promissory note

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13
Q

This represent overnight placement by banks with excess cash in other banks with temporary reserve deficiency

A

inter-bank call loans (IBCL)

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14
Q

This money market is dominated by government debt issued regularly

A

domestic money market

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15
Q

Aside from the bsp this is a major investor in money market

A

banking sector

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16
Q

Other major players in the money market are

A

Social Security System (SSS)
Government Services Insurance System(GSIS)
Home Development Mutual Fund (HDMF)
Trust funds
Insurance Companies
Private pension funds
mutual funds
retail investors

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17
Q

Prior to 2005 opening of this, there is no organized money market exchange in the country

A

Fixed Income Exchange (FIE)

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18
Q

Trading activity in the instruments of fixed-income exchange is dominated by the

A

banking sector
non-bank financial intermediaries

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19
Q

Capital market debt instruments

A

treasury bonds
fixed rate notes
small investors program bonds
long term commercial papers
asset backed securities
municipal bonds
tier 2 capital notes of banks
dollar-linked notes
other instruments

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20
Q

These are like treasury bills but longer and tenor

A

treasury bonds

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21
Q

These are direct unconditional obligation of the philippine government like treasury bonds but shorter and thinner usual is 2to7 years

A

fixed-rate notes

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22
Q

This were launched in the late 1990s to attract retail investors basically the government is issuing this instruments with similar characteristics as the regular action instruments

A

Small investors program bonds

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23
Q

These are the most common form of corporate borrowings issued by resident corporations

A

Long-term commercial papers

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24
Q

These are a pool of homogeneous assets that are securitized

A

Asset-backed securities

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25
Q

These are debts of local government unit undertaken to finance local government projects

A

municipal bonds

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26
Q

This will provide credit enhancement of municipal bond issues

A

Local government guarantee corporation and the home guarantee corporation

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27
Q

These are intended to beef up the banks capital structure in order to comply with the bsp capital adequacy ratio

A

tier 2 capital notes of banks

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28
Q

It is the issuance of subordinate a depth papers with a fixed yield that can be converted into equity upon maturity

A

Tier 2 capital notes of banks

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29
Q

These are dollar-denominated obligations of the republic of the philippines and other private companies

A

dollar-linked notes

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30
Q

These are the bonds offered by government owned and controlled corporations the national power corporation and the land bank of the philippines

A

other instruments

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31
Q

This remains the largest issuer of debt in the country

A

Philippine government

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32
Q

GOCC

A

government owned and controlled corporation

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33
Q

Asset-backed securities comprised the bulk of

A

private issuances, with the rest issued in bonds, corporate notes, and commercial paper lines

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34
Q

This is a comprehensive financial market infrastructure that aims to provide an electronic platform for trading clearing and settlement and depository and custodianship fixed income securities and its derivatives

A

Fixed-income exchange

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35
Q

BAP

A

Banker’s Association of the Philippines

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36
Q

It plays a key role in the development of the local capital market by providing an online inter dealer trading platform for the secondary trading of government securities

A

Fixed Income Exchange

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37
Q

These are equity instruments

A

common stocks
preferred stocks
convertible shares
warrants

38
Q

this represent ownership in a company whereby an investor partakes in the prophets ownership and management of the company

A

common stocks or ordinary shares

39
Q

They are entitled to voting rights and prorated division of profits among stockholders

A

common shareholders

40
Q

They have the last claim on dividends and corporate liquidation

A

common stockholders

41
Q

Who can acquire the class a shares

A

Philippine Nationals

42
Q

Who can acquire the class b shares

A

any person, corporation, or association

43
Q

This is also known as preferential shares and this are given preference over common shares whereby the preferred holders are entitled to dividends or assets of the corporation in case and liquidation

A

preferred stocke

44
Q

This usually carries a specific rate of return or fixed dividend and a specified redemption price

A

preferred stocks

45
Q

It can be converted into common shares at a specified time and price in the future

A

convertible shares

46
Q

These are usually issued together with a bond, preferred stock, or common shares that give the holder the right to buy a proportionate amount of common shares at a specified price and time

A

warrants

47
Q

The issuers of the philippine equities markets

A

Financial issuers
industrial issuers
holding firms issuers
property issuers
services issuers
mining and oil issuers
preferred
warrants, philippine deposit receipts, etc

48
Q

This sector includes banks and other financial institutions

A

Financial issuers

49
Q

This sector includes electricity, power and water, food, beverages, and tobaco, construction, infrastructure, and allied services, chemicals, and diversified industrial

A

Industrial issuers

50
Q

This sector includes companies such as ayala corporation, JG summit holdings incorporated, and sm investments corporation

A

Holding firms issuers

51
Q

This sector includes land developers and real estate companies included in the sector or ayala land incorporated and robinsons land incorporated

A

Property issuers

52
Q

This sector includes media, telecommunications, information technology, transportation services, hotel and leisure, education, and diversified services

A

services issuers

53
Q

This includes companies engage in mineral exploration and extraction

A

mining and oil issuers

54
Q

Examples of these include pldt 10% cumulative convertible preferred series and ayala corporation class a and b shares

A

preferred

55
Q

Examples of these include abs-cbn holdings corporation philippine deposit receipt gma holdings incorporation philippine deposit receipt and megaworld corporation warrants

A

Warrants, Philippine Deposit Receipts

56
Q

During the 1980s this are the majority investors in the philippine stock market

A

Individual domestic participants

57
Q

From 1990s this have been the active participants in the stock market

A

Trust departments
insurance firms
institutional investors both local and foreign

58
Q

More recently they are investing in the equities market by a mutual funds, affording them low initial investment outlay, asset diversification, and professional management

A

retail investors

59
Q

This is the philippines formal market for equities transaction

A

Philippine stock exchange

60
Q

The instruments traded in the foreign exchange market

A

Spot transactions
foreign exchange forward contracts
swap contracts

61
Q

This is the most common foreign exchange transactions

A

Spot transactions

62
Q

This is a commitment to buy one currency against another currency at a future date at a predetermined foreign exchange rate

A

Foreign exchange forward contracts

63
Q

This is an agreement between two or more parties where the cash flows or exchange into different currencies based on an agreed notional amount and maturity

A

swap contracts

64
Q

Most transactions in foreign currency are done through the

A

Philippine dealing system

65
Q

It provides a platform for the buyers and the sellers to meet with the provision of real-time weighted average weight and volume of trades for the peso

A

Philippine dealing system

66
Q

The instances when the bsp defends the peso from speculative attacks

A

directly or indirectly

67
Q

It is when the bsp intervenes by buying or selling foreign exchange in the market

A

directly

68
Q

It is when the bsp adjust the regulation on allowable transaction and amount an individual may purchase

A

indirectly

69
Q

They are not participants in the philippine dealing system but they also have the option to self their foreign exchange to banks

A

money changers

70
Q

Derivative instruments traded in the country with stock

A

Forward contracts
swap contracts
option contracts

71
Q

These are contracts which obligate the holder to buy or sell an asset at a predetermined delivery price at a predetermined future date

A

Forward contracts

72
Q

This contract specifies a simultaneous exchange in cash flows by both parties based on movements link to the prices values or returns of an underlying asset instruments

A

Swap contracts

73
Q

It is an agreement between two parties obligating themselves to fulfil their contractual agreement at specified dates in the future

A

Swap contract

74
Q

The most commonly used to swap contracts

A

Currency swaps and interest rate swaps

75
Q

This is an contract which is a right but not an obligation to buy or sell an underlying asset at the certain date and price

A

option contract

76
Q

The two basic types of options

A

Put option and call option

77
Q

It gives the holder the right to buy the underlying asset be a certain date for a certain price

A

Call option

78
Q

It gives the holder the right to sell the underlying asset by a certain date for a certain price

A

Put option

79
Q

The first three derivatives licenses were given to

A

citibank
bank of america
hongkong shanghai banking corp

80
Q

This is the first local bank granted a derivative license

A

equitable PCI bank

81
Q

What are the hybrid securities

A

Convertible bonds
preferred shares
convertible preferred
mortgage-backed securities
options and futures

82
Q

It is a fund which will assist individuals stock market investors in filing and prosecuting a criminal case against a trading participants

A

prosecution fund

83
Q

PERAA

A

RA 9505
Personal Equity Retirement Account Act

84
Q

This envisioned to promote long-term savings for a more dependable retirement account

A

PERAA

85
Q

This act provides a maximum contribution limit of 100,000 per individual and 200,000 for ofw

A

PERAA

86
Q

REIT

A

RA 9856
Real Estate Investment Trust Act

87
Q

It is stablish as the framework for a more secure investment in real estate assets

A

REIT

88
Q

This is envisioned to stimulate real estate investments and provide a consistent cash flow to investors with a compulsory dividend mandate and reduce income taxes

A

REIT

89
Q

RA9510

A

Credit Information System Act

90
Q

It is publishes a comprehensive and centralized credit information system allowing financial institutions ready access to accurate and up-to-date credit information for a more credible and stable financial system

A

Credit information system act

91
Q

This act is expected to promote financial discipline and lowers intermediation cost of the system

A

Credit Information System Act

Capital Market (3 decks)

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