financial markets

Question 1

asset

Answer 1

a resource that can be sold for money

Question 2

liability

Answer 2

an amount owed by a business either a current or non current liability

Question 3

money

Answer 3

primarily a medium of exchange or means of payment but also a store of value

Question 4

money supply

Answer 4

the stock of financial assets which function as money

Question 5

narrow money

Answer 5

the part of the stock f money made uo of cash and liquid bank and building society deposits

Question 6

broad money

Answer 6

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.

Question 7

liquidity

Answer 7

measure of ease with which an asset can be converted into cash without loss of value. cash is the most liquid of all asses

Question 8

shares

Answer 8

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

Question 9

bonds

Answer 9

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

Question 10

equity

Answer 10

the assets that people own

Question 11

debt

Answer 11

peoples financial liabilities or money that they owe

Question 12

Financial markets

Answer 12

Markets in which financial assets or securities are traded

Question 13

Treasury bills

Answer 13

Short dated government debt which case the holder a fixed rate of interest until redemption

Question 14

Commercial bills

Answer 14

Short dated that issued by private businesses which paid the holder fixed rate of interest

Question 15

Money markets

Answer 15

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

Question 16

Capital markets

Answer 16

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

Question 17

Foreign exchange markets

Answer 17

Also known as forex all currency markets, global decentralised markets for the trading of currencies

Question 18

Corporate bonds

Answer 18

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

Question 19

Government bonds

Answer 19

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

Question 20

Coupon

Answer 20

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

Question 21

Yield

Answer 21

The annual interest on a bond expressed as a percentage of the bonds current market price

Question 22

Maturity date

Answer 22

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

Question 23

capital gain

Answer 23

The profit made on the buying and selling of financial and other assets

Question 24

Commercial bank

Answer 24

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

Question 25

Investment bank

Answer 25

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

Question 26

Systemic risk

Answer 26

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

Question 27

Credit

Answer 27

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

Question 28

Profitability

Answer 28

The state or condition of yielding a financial profit or gain

Question 29

Security

Answer 29

Secured loans such as mortgage loans are secured against the value of property, are less risky for banks than unsecured loans

Question 30

Central bank

Answer 30

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