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CAPITAL MARKET MIDTERM > Lesson 1 > Flashcards

Lesson 1 Flashcards

1
Q

are the FINANCIAL INSTITUTIONS THAT ACT AS A BRIDGE between investors or savers (surplus units or SUs) and borrowers or security issuers (deficit units of DUs).

A

Financial Intermediaries

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2
Q

are the FINANCIAL INSTITUTIONS THAT ACT AS A BRIDGE between investors or savers (surplus units or SUs) and borrowers or security issuers (deficit units of DUs).

A

Financial Intermediaries

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3
Q

A BORROWER - LENDER RELATIONSHIP is the typical direct finance relationship or transaction. The claims arising from a direct finance transaction, like deposit, loan, and stock are all primary or direct securities.

A

DIRECT FINANCE

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4
Q

A BORROWER - LENDER RELATIONSHIP is the typical direct finance relationship or transaction. The claims arising from a direct finance transaction, like deposit, loan, and stock are all primary or direct securities.

A

DIRECT FINANCE

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5
Q

is like a RELATIONSHIP BETWEEN THE DEPOSITOR OF A BANK and the borrowers of the same bank.

A

INDIRECT FINANCE

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6
Q

was HIGHLY SPECIALIZED FINANCIAL SYSTEM where banks were set up to take deposits and grant only short-term loans.

A

The Old Financial Environment (OFE)

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7
Q

refer to financial institutions that ACCEPT DEPOSITS FROM SURPLUS UNITS

A

Depository Institutions

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8
Q

can be WITHDRAWN BY USING CHECKS.
most of it does not earn interest, although due to competition, there are now banks offering interests

A

Current or savings accounts

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9
Q

can be WITHDRAWN BY USING THE PASSBOOKS given by the bank to the depositors when they initially make their deposits

A

Savings accounts

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10
Q

refer to deposits that HAVE MATURITY, like 30 days, 60 days, 180 days, or one year.

A

Time deposits

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11
Q

are perhaps the BIGGEST of the depository institutions.

A

Commercial bank

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12
Q

perform the more simple functions of ACCEPTING DEPOSITS AND GRANTING LOANS.

A

Ordinary Commercial Banks

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13
Q

are COMBINATION of commercial banks and investment house. They offer the WIDEST VARIETY OF BANKING services among financial institutions.

A

Universal banks or expanded commercial banks

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14
Q

rating aims to determine bank’s overall condition and IDENTITY ITS STRENGTH AND WEAKNESSES financially, operationally and managerially.

A

The CAMELS

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15
Q

is COMPOSED OF SAVINGS AND MORTGAGE BANKS, stock savings and loan associations, private development banks, microfinance thrift banks, and credit unions.

A

Thrift banking system

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16
Q

are BANK SPECIALIZING IN GRANTING MORTGAGE LOANS other than the basic function of accepting deposits

A

Savings and mortgage banks

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17
Q

do not accept deposits but EXTEND LOANS.

A

Mortgage bank

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18
Q

ACCUMULATE SAVINGS OF THEIR DEPOSITORS/STOCKHOLDERS and use these accumulated savings, together with their capital for the loans that they grant and for investments in government and private securities.

A

Stock savings and loan association (S&L)

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19
Q

CATER TO THE NEEDS OF AGRICULTURE and industry providing them with reasonable rate loans for medium-and-long-term purposes.

A

Private development banks

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20
Q

are SMALL THRIFT BANKS that cater to small, micro, and cottage industries.

A

Micro finance thrift banks

21
Q

are cooperatives ORGANIZED BY PEOPLE FROM THE SAME ORGANIZATION (whether formally or informally organized) like farmers, fishermen, teachers, sailors, employees, and so on.

A

Credit unions

22
Q

are the MORE POPULAR TYPENOF BANKS in the rural communities

A

Rural and Cooperative Bank

23
Q

are financial intermediaries that SELL LIFE INSURANCE POLICIES.

A

Life insurance companies

24
Q

offer PROTECTION AGAINST pure risk.

A

Property/Casualty insurance companies

25
Q

INSURES ONE’S HOUSE and its contents

A

Homeowners insurance

26
Q

covers one’s spouse’s, and relatives’ home and OTHER LICENSED DRIVERS to whom the insurer gives permission to drive his car.

A

Auto insurance

27
Q

is taken if one considers FLOOD TO BE A RISK for his business or property

A

Flood insurance

28
Q

is a separate type of coverage that protects one’s home or business AGAINST WIND DAMAGE.

A

Windstorm insurance

29
Q

a special type of insurance that provides COVERAGE OVER and above one’s AUTOMOBILE OR HOMEOWNER POLICY.

A

Umbrella liability policy

30
Q

is a type of insurance that covers the cost of an insured individual’s MEDICAL AND SURGICAL EXPENSE during an illness.

A

Health insurance

31
Q

is defined as a need for assistance with some of the ACTIVITIES OF DAILY LIVING.

A

Long-term care

32
Q

PROTECT PROFESSIONALS, such as doctors, financial advisors, nursing home administrators, lawyers, etc., against financial losses from lawsuits filed against them by their clients or patients.

A

Professional liability insurance

33
Q

is an OPTIONAL PURCHASED from lenders and often associated with mortgages, loans, or CREDIT CARDS.

A

Credit insurance

34
Q

are PENSION FUND companies and MUTUAL FUND companies

A

Fund Managers

35
Q

SELL CONTRACT TO PROVIDE INCOME to policyholders during their retirement years

A

Pension fund companies

36
Q

are companies that ALLOW INVESTORS, including individuals, to BUY INTO MUTUAL FUNDS that buy different securities in the securities market.

A

Mutual fund companies

37
Q

are financial intermediaries that POOL RELATIVELY SMALL AMOUNTS OF INVESTORS MONEY to finance large portfolios of investment that justify the cost of professional management

A

Investment companies

38
Q

are PROFIT-ORIENTED FINANCIAL INSTITUTIONS that borrow and lend funds to households and businesses

A

Finance companies

39
Q

PROVIDE INSTALMENT CREDIT TO BUYERS of big-ticket items like cars and household appliances

A

Sales finance companies

40
Q

PROVIDE INSTALMENT CREDIT TO BUYERS of big-ticket items like cars and household appliances

A

Sales finance companies

41
Q

GRANT SMALL LOANS TO INDIVIDUALS, generally those with low credit ratings and are unable to borrow from the regular lending institutions like banks and thrifts.

A

Consumer finance companies

42
Q

also KNOWN AS BUSINESS FINANCE COMPANIES, grant credit to business

A

Commercial fiancé companies

43
Q

are only COMPENSATED BY MEANS OXF COMMISSION. They act as financial intermediaries in the sense that they look for investors or savings units for the benefit of the borrowers of deficit units.

A

Securities brokers

44
Q

BUY SECURITIES AND RESELL THEM AND MAKE PROFIT on the difference between their purchase price and their selling price.

A

Securities dealers

45
Q

are the AGENCIES where people and some SMALL BUSINESSES “pawn” their assets as collateral in exchange of amount much smaller than the value of asset.

A

Pawnshops

46
Q

are corporations organized for the purpose of ACCEPTING AND EXECUTING TRUSTS and acting as trustee under wills, as executor, or as guardian

A

Trust companies

47
Q

are INDIVIDUALS OR COMPANIES WHO LOAN FUNDS TO BORROWERS, generally consumers or households

A

Lending investors

48
Q

are INDIVIDUALS OR COMPANIES WHO LOAN FUNDS TO BORROWERS, generally consumers or households

A

Lending investors

CAPITAL MARKET MIDTERM (3 decks)

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