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Finance > Module 14 > Flashcards

Module 14 Flashcards

1
Q

What different organisations can the term bank apply to?

A

commercial banks
investment banks
central banks
merchant banks

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2
Q

What is a commercial bank?

A

collects deposits or money from individuals or companies and lends money if they wish to borrow.
This is called financial intermediation

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3
Q

What are building societies?

A

operate ina similar way to commercial but without shareholders. instead borrowers and lenders are members

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4
Q

What is NS&I?

A

OPERATES ONLINE AND in post office. takes deposits and backed by treasury BUT DOESNT LEND

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5
Q

What is peer to peer lending?

A

by websites- direct. cheaper

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6
Q

What is an investment bank?

A
  • provide advice to raise finance
  • M&A
  • buy shares and bonds on behalf of clients
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7
Q

What is general insurance?

A

non-life insurance

e.g. for vehicles, pets, health etc

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8
Q

What is life insurance?

A

fixed term policy, say for fifteen years

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9
Q

What is life assurance?

A

not fixed term and provides cover till death.

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10
Q

What is a term insurance policy?

A

insured for a specific period of time

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11
Q

what is a whole of life policy?

A

sum upon death of policy holder

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12
Q

What is an endowment policy?

A

combines life and savings. usually associated with mortgages

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13
Q

What is a collective investment scheme?

A

invetsors pool their money into large fund and it is invested on their behalf

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14
Q

What are the three types of investment management styles?

A

active, passive, hybrid

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15
Q

What are unit trusts?

A

creates new units when investors subscribe and cancels units when investors cash out.

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16
Q

Who monitors unit trusts?

A

trustees and objectives are outlined in trust deeds. trust deed also sets out charges the investor is subject to.

17
Q

How are unit trusts priced?

A

continuously. updated at regular intervals e.g. daily. this is called the valuation point.

18
Q

What are OEICS?

A

like unit trusts but structured as a company rather than a trust. this means they can continually issue and redeem their own shares.

19
Q

Are OEICS listed on an exchange?

A

may or may not be

20
Q

What is a depositary?

A

like a trustee =. must be independent and the assets of the OEIC are registered in the depositary’s name.

21
Q

What is an investment trust?

A

-public limited companies with shares on the stock exchange. They are closed end i.e. there is a fixed amount of shares.

22
Q

What is the net asset value?

A

calculated by the fund manager each day

NAV= net assets attributable to ordinary / no ordinary shares in issue

23
Q

What is monetary stability?

A

prices are stablehand there is confidence in the local currency.

24
Q

What is financial stability?

A

can be achieved by identifying threats to the finical system as a whole, therefore maintaining public confidence. Done by the Financial Policy committee

25
Q

What is the financial policy committee?

A

committee of the BoE.
looks at risks and weaknesses in the UK finical system. Made up of 13 member, 6 from BoE. Meet quarterly and at times of crisis.

26
Q

What can the FPC do?

A
  • set min capital requirements for banks
  • set gearing limits
  • borrwoing limits
  • limits on lending.
27
Q

What is the Prudential regulation authority?

A

monitors internal systems and controls of firms, as well as management and finical resources.

28
Q

What are the objectives of the Prudential regulation authority?

A

-promote safety and soundness
-degree of proaction of insurance policy holders
-facilitate competition
-

29
Q

What is the difference between FPC and PRA?

A

FPC- financial system as a whole

PRA- individual firms

30
Q

what is the FCA?

A

independent public body which accountable to the treasury. its objective is to ensure the relevant markets function well.

31
Q

What are the objectives of the FCA?

A
  • appropriate degree of protection for consumers
  • protect and enhance the integrity of the financial system
  • promote competition
32
Q

What are some responsibilities of the FCA?

A
  • regulate the conduct of financial services firms
  • prudential regulations of those not covered by PRA
  • listing rules for admission to LSE
  • tackling financial crime
33
Q

What are regulated activities?

A 
lenders
debt collection
advising investments
dealing investments
insurance
mortgages
34
Q

What firms are exempt from FCA?

A
  • professional firms e.g. solicitors, accountants, actuaries - have their ow professional body
  • firms offering payments by instalments
  • appointed representatives working on behalf of authorised firms
35
Q

What offences does the Bribery Act Identify?

A
  • paying bribes
  • receiving bribes
  • bribery of foreign public officials
  • failure of commercial organisations to prevent bribery

Finance (9 decks)

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