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Financial Markets > FUNDAMENTALS OF FINANCIAL MARKETS > Flashcards

FUNDAMENTALS OF FINANCIAL MARKETS Flashcards

1
Q

They are the stock market, bond market, forex market, derivatives where buyers and sellers trade commodities financial securities (financial assets which are stocks, bonds, treasury bills) foreign exchange and other freely exchangeable (fungible-mutually interchangeable) and derivatives of value at low transaction costs and at prices that are determined by market forces.

A

TRADING SECURITIES

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2
Q

It refers broadly to any marketplace.

A

Financial Markets

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3
Q

They are the places wherein the financial instruments are being bought and sold by corporations, gov, individuals etc.

A

Financial Markets

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4
Q

It is a market where individuals, firms, banks, and the government push cash for a short period of time, it matures for 1 year or less.

A

money market

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5
Q

It is a market where the trade debt securities mature for 1 year or less.

A

money market

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6
Q

The instruments used are deposits, collateral, loans, acceptances, and bill of exchange and it is a short-lending system where there is less risk but low return.

A

money market

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7
Q

What are the types of commodities?

A
  1. Metal
  2. Energy
  3. Livestock
  4. Agricultural
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8
Q

They are the largest stock operator

A

NASDAQ

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9
Q

They are a pool of financial resources and invest in diversified portfolios. Wherein they are a pool of financial resources and invest in diversified portfolios.

A

mutual fund

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10
Q

They underwrite securities and engage in securities brokerage and trading.

A

securities firms and investment banks

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11
Q

They are depository institutions in the form of savings and loans, credit unions, and they focus on local people.

A

Thrift bank

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12
Q

It is the agreement between 2 parties to exchange a standard quantity of an asset at a predetermined price on a specified date in the future.

A

Derivative Security

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13
Q

What are the types of Financial Institutions?

A
  1. Commercial banks
  2. Thrifts
  3. Insurance companies
  4. Securities firms and investment banks
  5. Finance companies
  6. Mutual funds
  7. Pension funds
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14
Q

They are the traders and perform the essential function of channeling funds from those with surplus funds.

A

financial institution

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15
Q

They are depository institutions whose major assets are loans and major liabilities are deposits.

A

commercial bank

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16
Q

They protect individuals and corporations from adverse events.

A

insurance companies

17
Q

They make loans to individuals and business

Central Bank of the Philippines, Citi

A

finance companies

18
Q

It is where the financial instruments such as underlying assets and financial derivatives involve hedgers, speculators, arbitrageurs, and margin traders.

A

derivatives security markets

19
Q

2 types of Forex

A
  1. Spot FX transaction - it involves the immediate exchange of currencies at the current exchange rate.
  2. Forward FX transaction - it involves the exchange of currencies at a specific date in the future and at a specified exchange rate.
20
Q

It is the market in which the users of the funds such as the corporations and government raise funds by issuing financial instruments like stocks and bonds.

A

Primary market

21
Q

It is where the borrowers of money obtain funds from lenders by selling or issuing financial instruments or securities such as stocks and bonds.

A

Primary market

22
Q

These are the markets where people can buy and sell existing securities.

A

Secondary market

23
Q

It is the market where financial instruments are traded among investors.

A

Secondary market

24
Q

It is the market that deals in trading 1 currency for another (dollar for yen).

A

foreign exchange markets

25
Q

It is also known as Forex, FX, currency market which determines the exchange rate for currencies.

A

foreign exchange markets

26
Q

It is the market that trade bonds and equity securities such as stocks instruments with maturities of more than 1 year

A

capital market

27
Q

What is the regulation of Financial Institutions?

A

Financial institutions provide vital financial services to all sectors of the economy.

Their regulation is in the public interest.

To prevent their failure and the failure of financial markets overall.

28
Q

What are the risks faced by financial institutions?

A
  1. Interest rate risk (fluctuating)
  2. Foreign exchange
  3. Market risk
  4. Credit risk
  5. Liquidity risk
  6. Off-balance risk (based to grant loan)
  7. Technology risk
  8. Operational risk
  9. Country or sovereign risk
  10. Insolvency risk
29
Q

They offer saving plans for retirement.

A

pension fund

Financial Markets (10 decks)

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