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GLOBAL FINANCE WITH ELECTRONIC BANKING > MODULE 2 > Flashcards

MODULE 2 Flashcards

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1
Q

systems of institutions, instruments, and practices that facilitate the transfer of capital between nation

A

International Financial Markets

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2
Q

the markets enable companies,
governments, and other organizations to
obtain financing and manage financial risks
across border

A

International Financial Markets

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3
Q

Structure of International Financial Markets

A

Capital Markets
Money Market
Foreign Exchange Markets
Derivatives Markets
Commodity Markets

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4
Q

These markets involve the trading of longterm debt and equity securities. They include stock markets (e.g., NYSE, London Stock
Exchange) and bond marke

A

Capital Market

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5
Q

Short-term debt instruments, such as Treasury bills and commercial paper, are traded in _____. These markets are crucial for managing short-term liquidity need

A

Money Market

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6
Q

These markets facilitate the exchange of currencies, allowing for international
trade and investment
- include London, New York, and
Tokyo

A

Foreign Exchange Market

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7
Q

Financial derivatives such as futures,
options, and swaps are traded in these
markets. They are used for hedging
risk or speculation

A

Derivatives Markets

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8
Q

These involve the trading of physical
goods like oil, gold, and agricultural
products, often linked to international
trade and investment

A

Commodity Markets

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9
Q

Functions of International Financial Markets

A

Capital Allocation
Risk Management
Price Discovery
Liquidity Provision
Facilitation of Trade and Investment

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10
Q

International financial markets help
allocate capital across borders, ensuring that resources flow to where they are most needed

A

Capital Allocation

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11
Q

These markets offer instruments to
hedge against currency risk,
interest rate risk, and other financial
risks

A

Risk Management

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12
Q

International financial markets play
a key role in determining the prices
of financial instruments and
commodities through the interaction
of supply and demand

A

Price Discovery

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13
Q

They provide liquidity by allowing
investors to buy and sell financial
instruments, thereby facilitating
investment and consumption

A

Liquidity Provision

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14
Q

These markets enable international
trade and investment by providing the
necessary financing and risk
management tool

A

Facilitation of Trade and Investment

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15
Q

A multinational corporation like Apple
Inc. uses international financial markets
to issue bonds in different currencies to
finance its global operations. It may
also use _____ to hedge
against currency risk associated with its
revenues in multiple countri

A

derivatives markets

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16
Q

is a global decentralized
market for the trading of currencies.
It is the largest financial market in
the world, with a daily trading
volume exceeding $6 t

A

foreign exchange market

17
Q

Currency Dynamics

A

Exchange Rates
Currency Pairs
Spot Market
Forward and Futures Markets

18
Q

The price of one currency in terms of
another, which fluctuates due to
various factors including interest
rates, inflation, political stability, and
economic performance

A

Exchange Rates

19
Q

Currencies are traded in pairs (e.g.,
EUR/USD), with the first currency
being the base and the second
being the quote

A

Currency Pairs

20
Q

Where currencies are traded for
immediate delivery. Most forex
transactions occur in the _____

A

Spot Market

21
Q

These markets allow participants to
buy or sell currencies at a set price
for future delivery, helping manage
the risk of currency fluctuation

A

Forward and Future

22
Q

Companies engaged in ____ use forex markets to convert currencies and manage exchange rate risk

A

international trade

23
Q

Traders use ____ to speculate on currency movements to profit from changes in exchange rates

A

forex markets

24
Q

Traders exploit ____ in different markets or forms of a currency to make a profit without risk

A

price differences

25
Q

Companies and investors use ____ to hedge against potential losses from adverse currency
movements

A

forex markets

26
Q

A European company importing goods
from the United States might use the
forex market to purchase U.S. dollars
(USD) by selling euros (EUR) to pay its
suppliers. To protect against future
currency fluctuations, the company might
enter into a ____ to lock in
the exchange rate.

A

forward contract

27
Q

financial organizations that provide financial support and advice for economic development activities in
developing countries

A

International Financial Institutions

28
Q

International Financial Institutions

A

International Monetary Fund IMF
World Bank
regional development banks
Asian Development Bank (ADB)

29
Q

monitors the global economy and member
countries’ economies to identify risks and provide policy advice

A

(International Monetary Fund)

30
Q

Provides short-term financial assistance to countries facing balance of payments problems

A

(International Monetary Fund)

31
Q

Offers technical assistance and training to help countries build effective econonomic institutions

A

(International Monetary Fund)

32
Q

Provides long-term funding for development projects in areas like infrastructure, education, and health

A

World Bank

33
Q

Focuses on reducing poverty by providing lowinterest loans and grants to developing countries

A

World Bank

34
Q

Conducts research and provides data on global economic issues

A

World Bank

35
Q

Provides loans, grants, and technical assistance to promote economic development in Asia

A

Asian Development Bank

36
Q

Focuses on infrastructure development to support economic growth and reduce poverty in Asia.

A

Asian Development Bank

37
Q

Promotes environmentally sustainable growth
and supports projects that address climate
change.

A

Asian Development Bank

38
Q

In 2020, the ____ provided emergency
financial assistance to over 80 countries
to help them cope with the economic
impact of the COVID-19 pandemic. The
____ also launched a fast-track
facility to provide $160 billion in financing
over 15 months to help countries
respond to the health, social, and
economic impacts of the pandem

A

IMF, World Bank

GLOBAL FINANCE WITH ELECTRONIC BANKING (7 decks)

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