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CFMP > Exam #1 > Flashcards

Exam #1 Flashcards

1
Q

Two types of investors:

A
  1. Retail investors
  2. Institutional investors
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2
Q

any issuance succeeding the IPO

A

secondary public offering

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3
Q

Where does IPO and 2PO raised?

A

primary market

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4
Q

It is where the trades are made

A

secondary market

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5
Q

firms that provide financial services and advice to their clients

A

Financial institutions

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6
Q

Salient points of financial institution definition

A
  • Provide financial services
  • Advice clients
  • Regulated by laws
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7
Q

3 Roles of Financial Institutions

A
  1. Act as intermediary between the capital and debt markets
  2. Responsible for the transfer of funds from investors to companies
  3. Key entities that control the flow of money in the economy
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8
Q

Types of financial institutions

A
  1. Banks
  2. Credit unions
  3. Stock brokerage
  4. Asset Management firms
  5. Insurance companies
  6. Finance companies
  7. Remittance companies
  8. Trust companies
  9. FOREX
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9
Q

Minimum amount to have your money managed in asset management firms

A

20 million

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10
Q

In this financial institution, money that is lent out is contributions.

A

Financial companies

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11
Q

This is different from assurance companies.

A

Insurance companies

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12
Q

3 people involved in trust companies:

A
  1. Trustee
  2. Trustor
  3. Beneficiary
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13
Q

The collection of foreign currency that a country holds

A

Gross International Reserves

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14
Q

4 phases of business cycle

A
  • Prosperity
  • Recovery
  • Recession
  • Depression
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15
Q

a class that best gauge of economic activity

A

middle class

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16
Q

they bridge the gap between borrowers and issuers of bonds

A

credit-rating agencies

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16
Q

This contributed to the growth of consumer loans in the country and will be felt in the long run

A

investment grade ratings

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16
Q

it provides job opportunities and compensation

A

stability in the economy

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17
Q

There will be challenges that will come along the way that will test the resilience of the Philippine economy but the ________ will buoy the economy

A

strong economic fundamentals

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17
Q

Tiger Cub Economies

A

Indonesia, Malaysia, the Philippines, Thailand and Vietnam

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18
Q

Rapid and sustained poverty reduction

A

Inclusive growth

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19
Q

allows people to contribute to and benefit from economic growth

A

inclusive growth

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20
Q

rapid pace of growth is unquestionably necessary for substantial poverty reduction, but for this growth to be sustainable in the long run, it should be broad-based across sectors, and inclusive of the large part of the country’s labor

A

inclusive growth

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21
Q

implies a direct link between the macro and micro determinants of growth

A

inclusive growth

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22
Q

8 indicators of inclusive economic growth

A
  1. Reduced poverty and inequality
  2. economic growth and employment
  3. key infrastructure endowments
  4. access to education and health
  5. access to basic infrastructure utilities and services
  6. gender equality and opportunity
  7. social safety nets
  8. good governance and institutions
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23
Q

It captures the importance of structural transformation for economic diversification and competition, including creative destruction of jobs and firms

A

micro dimension

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24
Q

Ways that companies raise funds

A
  • finance capital expenditures (acquisitions, investments)
  • working capital
  • pay off/refinance existing debt
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25
Q

the stock exchange of the Philippines

A

PSE - Philippine Stock Exchange

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26
Q

an organized market for tradable stocks and where brokers and traders buy/sell stocks

A

Stock Exchange

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27
Q

main index of the PSE and represents the general trend of the market

A

PSEi

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28
Q

How many companies in the PSEi

A

30 most active companies

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29
Q

Considerations of PSEi

A
  • public float
  • liquidity
  • market capitalization
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30
Q

what do you call those companies not included in PSEi

A

All shares

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31
Q

(Sector indices)

Financials

A

BDO
BPI
MBT

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32
Q

(Sector indices)

Industrials

A

MER
PCOR
URC
JFC

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33
Q

(Sector indices)

Holding firms

A

AC
AEV
SM
JGS

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34
Q

(Sector indices)

Property

A

ALI
SMPH
MEG

35
Q

(Sector indices)

Services

A

ICT
GLO
TEL
ABS

36
Q

(Sector indices)

Mining and Oil

A

NIKL
PX
LC

37
Q

operating members are entitled to how many trading booth

A

1 only

38
Q

Why buy stocks?

A
  1. Capital appreciation
  2. Ownership in the business
  3. Claim
39
Q

How do companies issue stocks?

A
  1. Initial public offering (IPO)
  2. Secondary public offering (2PO)
  3. Stock Rights Offering (SRO)
40
Q

Classification of stocks

A

common stocks
preferred stocks
warrants

41
Q

3 types of dividends

A

Cash dividends
Stock dividends
Property dividends

42
Q

date of announcement of dividends

A

Dividend declaration date

43
Q

the day that will not entitle a buyer to receive a dividend

A

Ex-dividend date

44
Q

the date when the company verifies who are entitled to receive the dividends

A

Record date

45
Q

Dividend is credited to the trading accounts

A

Payment date

46
Q

PSE uses what type of trading

A

scripless trading

47
Q

Type of trading in which settlement is done via the book-entry system (no physical transfer of certificate) thru Philippine Central Depository (PCD)

A

Scripless trading

48
Q

Stock certificates have to be lodged to be traded in the exchange

A
49
Q

First consideration when buying a stock

A

choosing a stock broker

50
Q

Settlement date

A

T + 2
(T - transaction date)

51
Q

Seller receive their proceeds, when?

A

after 2 working days

52
Q

3 institutions that play an important role in the settlement cycle

A
  1. Securities Clearing Corporation of the Philippines
  2. Settlement Banks
  3. Philippine Depository and Trust Corporation (PDTC)
53
Q

agency that facilitates stock clearing and settlement

A

Securities Clearing Corporation of the Philippines

54
Q

maintains cash accounts

A

Settlement banks

55
Q

responsible for safekeeping and overseeing of securities for clients

A

Philippine Depository and Trust Corporation (PDTC)

56
Q

Types of Orders based on lot size

A
  1. Normal lot
  2. Odd lot
  3. Board lot
57
Q

(Type of orders)

within the board lot table

A

normal lot

58
Q

(type of orders)

less than the normal unit of trading

A

Odd lot

59
Q

(type of orders)

large number of shares traded at an arranged price between two parties (at least 5M pesos)

A

Board lot

60
Q

Investing Procedures (5)

A
  1. Choose a broker
  2. Open an account
  3. Give your order
  4. Pay your settlement date
  5. Receive your proceeds/shares
61
Q

the maximum and minimum price of the stock for the day

A

Trading threshold

62
Q

maximum gain

A

50%m

63
Q

maximum loss

A

40%

64
Q

Orders that exceed the trading band are automatically rejected, EXCEPT when:

A
  1. the stock was suspended for at least a year
  2. listing by way of introduction (first day only)
65
Q

2 ways to measure thresholds

A
  1. Dynamic threshold
  2. Static threshold
66
Q

Classes under dynamic threshold

A

Class A - below 20 tranx in a month (20%)

Class B - 20 to 500 (15%)

Class C - 501 and above (10%)

67
Q

What is the difference between the selling transaction and buying transaction?

A

Stock transaction tax is levied to the seller, not the buyer

68
Q

Different types of orders

A
  1. Market Order
  2. Limit Order
  3. Day Order
  4. Good Till Cancelled (GTC)
  5. Stop Loss Order
69
Q

(type of order)

buy or sell immediately at the best available price

A

Market order

70
Q

(type of order)

Sets the max/min price at which one is willing to buy/sell stock

A

Limit order

71
Q

(type of order)

An order valid for that day

A

Day order

72
Q

(type of order)

order remains open in succeeding trading days until it is finally executive or cancelled

A

Good TIll Cancelled (GTC)

73
Q

(type of order)

to limit an investor’s loss on a position

can be a day order or GTC

A

Stop Loss Order

74
Q

Plan that fits your own goals and risk tolerance and should be realistic

A

Trading plan

75
Q

Styles as a trader

A
  1. Position traders
  2. Swing traders
  3. Day traders
76
Q

(trader)

medium to long term

A

Position traders

77
Q

(trader)

buy on oversold levels and sell on overbought levels

A

Swing traders

78
Q

(trader)

frequent buying and selling

A

Day traders

79
Q

2 approaches to fundamental analysis

A
  1. Top down approach
  2. Bottom up approacj
80
Q

3 Factors/considerations in Company Analysis

A

Sensible business plan
Solid management
Financial analysis

81
Q

Ratios do not mean anything until they are compared to:

A
  1. Historical or future data
  2. Industry or sector average
  3. Competitors
82
Q

The field of technical analysis is based on 3 assumptions

A
  1. market discounts everything
  2. price moves in trends
  3. history tends to repeat itself
83
Q
A
84
Q

(company analysis)

A competitive advantage

A

Sensible business plan

85
Q

(company analysis)

Well-managed track record

A

Solid management

86
Q

(company analysis)

Sound financials, great potential earnings

A

Financial analysis

87
Q

What is given in scripless trading when you buy a stock?

A

Statement of Account

88
Q

Settlement done via the book-entry system thru _________

A

Philippine Central Depository (PCD)

CFMP (5 decks)

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