financial markets Flashcards
asset
a resource that can be sold for money
liability
an amount owed by a business either a current or non current liability
money
primarily a medium of exchange or means of payment but also a store of value
money supply
the stock of financial assets which function as money
narrow money
the part of the stock f money made uo of cash and liquid bank and building society deposits
broad money
the party of the stock made up of cash, other liquid assets such as bank and building society deposits but also some illiquid assets. the measure o broad money used by the Bank of England is called M4.
liquidity
measure of ease with which an asset can be converted into cash without loss of value. cash is the most liquid of all asses
shares
dated financial assets sold initially by a company to raise financial capital. shares sold by public by public limited companies are marketable on a stock exchange but shares sold by private limited companies are not marketable. unlike a loan a share signifies that the holder owns part of the enterprise
bonds
financial securities sold by companies or by governments which are a form of long term borrowing. bonds usually have a maturity date on which †hey are redeemed, with the borrow usually making a fixed interest6 payment each year until the bond matures
equity
the assets that people own
debt
peoples financial liabilities or money that they owe
Financial markets
Markets in which financial assets or securities are traded
Treasury bills
Short dated government debt which case the holder a fixed rate of interest until redemption
Commercial bills
Short dated that issued by private businesses which paid the holder fixed rate of interest
Money markets
Provide a means for lenders and borrowers to satisfy their short-term financial needs. The term money market covers several markets including those for Treasury bills and commercial bills
Capital markets
Where security is such a shares of ones are issued to raise medium to long-term financing and are traded on the secondhand part of the market for example the London stock exchange and the new york stock exchange
Foreign exchange markets
Also known as forex all currency markets, global decentralised markets for the trading of currencies
Corporate bonds
That security issued by company and sold as new issues to people who learn long time to the company.
They can usually be resolved secondhand on the stock exchange
Government bonds
That security in the UK known as gilt edged securities issued by a government and sold as new issues to people who lend long-term to the government. They can be resolved secondhand on stock exchange
Coupon
The guaranteed fixed annual interest payment often divided into six months payments, paid by the issue of a bond to the owner of a bond
Yield
The annual interest on a bond expressed as a percentage of the bonds current market price
Maturity date
The date on which the issue of the dated security such gilt security Long dated oh I tried to build short dated, pays the face value of the security to the security owner
capital gain
The profit made on the buying and selling of financial and other assets
Commercial bank
Also known as a retail bank or High Street bank, a financial institution which aims to make profits by selling bank services to its customers
Investment bank
A bank which does not generally except deposits from ordinary members of the general public. Traditional investment banking refers to the financial advisory work advising private companies on how to become public companies by floating on the stock market or advising public companies on how to buy but other companies. Investment banks also deal directly in financial markets for their own account
Systemic risk
In a financial context the risk of a breakdown of the entire financial system caused by interlinkages in the financial system rather than simply the failure of an individual bank or financial institution
Credit
When a bank makes a loan, it creates credit. Learn results in the creation of an advance, which is an asset on the banks balance sheet, and a deposit, which is a liability of the bank
Profitability
The state or condition of yielding a financial profit or gain
Security
Secured loans such as mortgage loans are secured against the value of property, are less risky for banks than unsecured loans
Central bank
Provides financial and banking services its countries government and banking system, as well as implementing the governments monetary policy and issuing currency. The Bank of England is the U.K.’s central bank the European Central bank and countries using the euro currency
