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FMS Flashcards

1
Q

It is the price for one unit of the commodity. It is essentially the amount of currency that paid for 1 unit of the commodity currency.

A

Terms Currency

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2
Q

FX contract wherein settlement is beyond spot value date. Exchange rate is determined by the current spot rate and interest rate differential of the two currencies involved

A

Forward rate

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3
Q

It is the simultaneous purchase and sale of FX for different value dates (i.e. Spot + Forward)

A

Swap

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4
Q

The FX forward contract is also known as what:

A

Deliverable forward or Plain- Vanilla Forward

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5
Q

gives bondholders the right but not the obligation to sell their securities back to the issuer at a pre-determined price and date

A

Puttable (Put option)

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6
Q

A derivative is a security whose price is dependent upon or derived from one or more

A

Underlying assets

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7
Q

Develops solutions for trading and client requirements, enabling the business to deal in and/or offer a variety of financial products and services.

A

Product Management Division

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8
Q

It is a structure that uses both an underlying bond and a Cross Currency Swap.

A

Asset Swap

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9
Q

Handles peso and dollar funds generation through deposits and other investment products

A

Institutional Fixed Income Sales Division

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10
Q

In an FX Swap, the first exchange is called what and where a spot rate is used.

A

Near Leg

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11
Q

Who issues the Fixed-Rate Corporate Bonds (PHP)

A

Prime Domestic Corporations

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12
Q

It is an agreement to buy/sell one currency against the other for settlement up to T+2

A

Spot

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13
Q

It is a single currency plain vanilla IRS agreement wherein one party agrees to pay a series of fixed rate interest payment while
the other party pays a series of floating rate interest payment based on a notional principal.

A

Interest Rate Swap

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14
Q

It is the amount borrowed and it is given back to the investor on maturity date at its maturity value.

A

Par Value/ Face Value

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15
Q

It is just the future value of the spot rate, given current interest rates

A

Forward rate

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16
Q

Who are the typical sellers of Foreign Exchange?

A

Exporters, BPOs, Remittance, OFWs

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17
Q

What’s the formula of the swap points

A

Spot Rate x IRD x T/360

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18
Q

Day-to-day potential for an investor to experience losses from fluctuations in foreign exchange and security prices.

A

Market Risk

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19
Q
A
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20
Q

Who are under the primary markets

A

On the first issuance of:
1. Government
2. Corporations through IPOs

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21
Q

It can be seen as a combination of the two swap contracts

A

Cross Currency Swap (CCS)

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22
Q

Services corporate needs on foreign exchange requirements. Cross-sells other FX products and/or services to corporate clients, including forwards, swaps, and other derivative instruments.

A

Corporate & Commercial FX Sales Divisions

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23
Q

What is the benefit of the Asset Swap (ASW)

A

Yield enhancement and portfolio investment diversification

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24
Q

Minimum Investment amount for the T-Bills, RTBs, FXTns

A

Php 500,000 in par value

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25
Q

Who are the buyers/holders of bonds?

A

Individuals, Corporations, or organizations

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26
Q

How do you compute for the IRD or otherwise known as Interest Rate Differential

A

PHP interest rate- USD interest rate

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27
Q

If the coupon rate is lesser than the market rate, the bond is:

A

At a DISCOUNT

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28
Q

It is the selling rate of the bank

A

Offer rate

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29
Q

In contrast to the plain vanilla IRS, a CCS involves the

A

The Exchange of the face amounts

30
Q

Is it the buying rate of the bank

A

Bid rate

31
Q

Handles distribution of domestic and foreign fixed income securities to corporate clients and financial institutions.

A

Institutional Fixed Income Sales Division

32
Q

Statistical estimate of the maximum potential loss in the value of the trading portfolio under normal market conditions, for a given time horizon and confidence level.

A

Value at Risk (VaR) – A tool to control trading losses

33
Q

Corporate or Government bonds through the second market can be obtained through:

A
  1. Broker
  2. Via Exchange
  3. OTC
34
Q

It is merely a contract between two or more parties with its value determined by fluctuations in the underlying asset.

A

Derivative

35
Q

What’s the T-Bills Interest Payment schedule

A

Discounted; par/nominal value payable on maturity date

36
Q

If the coupon rate greater than the market rate, the bond is:

A

At a PREMIUM

37
Q

What is the minimum investment for Fixed-Rate Corporate Bonds
(USD)

A

Usually minimum trade lot is $200,000

38
Q

Handles distribution of domestic and foreign fixed income securities to retail clients thru the Bank’s branch network (RBB) and Wealth Management Group (WMG)

A

Treasury Retail Sales Division

39
Q

The second exchange is called what and it is where a forward rate is used.

A

Far-leg

40
Q

It is the currency that is being bought or sold

A

Commodity Currency

41
Q

It is an instrument of indebtedness of the bond issuer to the holders. It is a form of loan or IOU.

A

Bond

42
Q

It is a contract that simultaneously agrees to buy (or sell) an amount of currency at an agreed rate and to resell (or repurchase) the same amount of currency.

A

FX Swap

43
Q

Risk of principal or loss of a financial reward as a result of the failure of the borrower to repay a loan.

A

Credit Risk

44
Q

Who are the typical buyers of Foreign Currency?

A

Importers, Investors, and to pay USD loans

45
Q

Who are the issuers of the bonds?

A

Government and Corporations

46
Q

Leads the research and development of robust, effective market and macroeconomic views aimed at helping the Bank acclimate its strategies and/or operations with emerging market conditions, issues, and trends.

A

Economic and Markets Research Division

47
Q

occurs whenever a borrower is expecting future cash flows to pay a current debt.

A

Credit Risk

48
Q

It gives the bond issuer the right but not the obligation to redeem its issue of securities before the bond’s maturity. The issuer usually pays the bondholders a premium

A

Callable (Call Option)

49
Q

Sources fixed income securities via best execution for clients of Treasury Retail Sales and Institutional Fixed Income Sales

A

Broker Department

50
Q

Risk of loss attributable to people, processes, and systems.

A

Operational Risk

51
Q

It is a trading between the buyers and sellers.

A

Secondary Market

52
Q

How do treasury generate funds?

A

CASA, Time Deposit, LTNCD

53
Q

How does Treasury mainly works?

A

Funds Generation -> Monitoring -> Deployment/ Asset Generation

54
Q

It is an intermediation cost

A

Effective Cost

55
Q

How much is the rate for the short term products for CA/SA, Short-term products; 5 years

A

CA/SA- No DST
Short-term products- 0.0075
5-Year Products- 0.0015

56
Q

What is the RR (Reserve Requirement) for universal and commercial banks effective June 30, 2023

A

9.5%

57
Q

Under Liquidity Management, give at least 3 funding options.

A
  1. Corporate Market
  2. Repo with other banks
  3. Interbank Market
58
Q

It is the Lender of Last Resort

A

BSP

59
Q

Bank pays both principal and interest (i = prt) at maturity date

A

Time Deposit

60
Q

Possesses similar characteristics with that of a time deposit, but negotiable

A

Certification of Deposit

61
Q

Entity lending the cash/ buying the security (collateral)

A

Buyer (Reverse Repo)

62
Q

Entity borrowing cash and selling the security (collateral)

A

Seller (Repo)

63
Q

It short-term, unsecured, negotiable, and issued at a discount. It is usually issued by companies with good credit ratings

A

Commercial Paper

64
Q

Differs from a fixed-rate bond as interest is variably linked to a financial index adjusted periodically.

A

Floating Rates Notes

65
Q

An obligation on the part of the issuer to pay its investors the interest (e.g. quarterly, semi-annual) and principal at maturity

A

Fixed-Rate Bonds

66
Q

A bond is also a form of what:

A

Loan or IOU

67
Q

In CBC, who issues or underwrites Corporate Bonds

A

China Bank Capital Corp.

68
Q

Days counted from last coupon date up to the value date

A

Accrued Days

69
Q

What are the common underlying assets:

A
  1. Stocks
  2. Bonds
  3. Currencies
  4. Interest Rates
  5. Market Indexes
70
Q

Hedging tool allows client to _______ the price today for currency that is to be _________ or _________ for settlement in the future.

A

Lock in; Bought or Sold

71
Q

Cross-sells various financial products to both retail and institutional clients of the Bank catering to their investment and hedging needs.

A

Market Sales Group

72
Q

What is the term of T-Bills?

A

91 days; 182 days; 364 days

CBC (7 decks)

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