FM Exam Flashcards

1
Q

A Financial Institution that accepts deposits, offers checking account services, makes various loans and offers basic financial products like certificate of deposits (CDs) and savings accounts to individual and small businesses.

A

Commercial Banks

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2
Q

Are cooperative associations whose members have a common bond, It is a not-for-profit financial institution that accepts deposits, makes loans and provides a wide array of other financial services and products

A

Credit Union

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3
Q

Is a Financial Vehicle that pools assets from shareholders to invest in securities like stocks, bonds, money market instruments and other assets, They are operated by professional money managers , who allocate the fund’s assets and attempt to produce capital gains or income for the fund’s investors

A

Mutual Funds

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4
Q

Are retirement plans that accumulates capital to be paid out which is managed by corporations or government agencies

A

Pension Fund

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5
Q

Bring together people and organizations needing money with those having surplus funds, these are any location or system that enables traders of financial instruments, such as derivatives, bonds, shares, different global currencies to transact

A

FINANCIAL MARKET

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6
Q

Is a type of risk that cannot be eliminated through diversification

A

Non-diversifiable Risk

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7
Q

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today

A

FUTURE VALUE

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8
Q

Monetary charge for borrowing money generally expressed as a percentage, such as an annual percentage rate

A

INTEREST

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9
Q

Series of periodic payments or receipts usually made in equal amounts.

A

ANNUITY

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10
Q

The term which means that the money available at the present time is worth more than the same amount in the future due to its potential earning capacity

A

TIME VALUE OF MONEY

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11
Q

Is a long term contract under which a borrower agrees to make payments of interest and principal, on specific dates to its holders

A

BOND

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12
Q

It is sometimes referred to as government bonds

A

TREASURY BOND

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13
Q

This refers to the annual interest payment divided by the bond’s current price

A

CURRENT YIELD

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14
Q

The interest rate that would exist on a riskless security if no inflation were expected, and it may be thought of as the rate of interest on short-term treasury securities in an inflation-free world

A

Wla pa ko kabalo

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15
Q

Is a letter-based credit scoring schem used to judge the quality and credit-worthiness of a bond

A

BOND RATING

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16
Q

any form of additional compensation that is required to encourage investment in assets that cannot be easily and efficiently converted into cash at fair market value

A

LIQUIDITY PREMIUM

17
Q

The risk of an income decline due to a drop in interest rates

A

INTEREST RATE RISK

18
Q

Is a special segment of banking operation that helps individuals or organizations raise capital and provide financial consultancy services to them

A

INVESTMENT BANKING

19
Q

Is a supply of capital belonging to numerous investors used to collectively purchase securities while each investor retains ownership and control of his own shares

A

INVESTMENT FUND

20
Q

Is a kind of mutual fund that invests in highly liquid, near-term instruments

A

MONEY MARKET FUND

21
Q

can be eliminated
by holding assets the returns of
which are not perfectly correlated

A

DIVERSIFIABLE RISK