MT IDENTIFICATION Flashcards
Important component of financial market.
Serves as proof of transaction.
Used to facilitate the provision of fund for a certain economic undertaking.
It can be considered as a legal contract or endangered specifying the amount of transaction.
FINANCIAL INSTRUMENT
Refers to an asset or property that a borrower pledges a security for a loan or credit facility.
Collateral
Fixed interest rate that the issue pays to bond holder over the life of the bond.
Coupon rate
Refers to the ease with which an asset, security or investment can be both or sold in the market without causing significant changes in its price.
MARKETABILITY
Reflect the degree to which an asset can be quickly converted into cash at or near its fair market value.
MARKETABILITY
These financial instrument represent ownership interest in an entity.
Ownership claims
The financial instrument represent a contractual obligation and the part of a issuer to repay borrowed fund to the holder of instrument.
Debt claims
Financial instrument with id stable marketability
The common maturity period consists of 91 days 182 days and 364 days.
Used to finance the budget deficits of the national government.
Redeemed by the issue at the set amount at maturity date.
There is no interest payment however, interest is effectively pay because they are initial dissolved
Treasury bills
A short term promissory notes issued by a large establish business firm with a strong credit ratings.
It usually issued on 60 days 90 days 180 days basis.
Carriers higher yield also reflect higher risk and reduce liquidity
Maturity maybe tailored
Commercial paper
Can be converted into common shares of specified time and price in the future.
Convertible share
Refers to the ability to obtain a thing or value in a exchange for a promise to pay with money or something equally satisfactory to the seller at the some future time.
Credit
Staggered mode in a grid span of time and an agreed amount.
Installment
Is the instrument used by the government to stabilize the economy.
Refers to the set of actions and strategies implemented by a country’s central bank to manage and control the money supply and interest rates within a company.
Monetary policy
The primary objective is to maintain price stability conducted to a balance and sustainable economic growth.
Bangko Sentral ng Pilipinas
Refers to a condition of low and stable inflation.
Price stability
The price at which one currency is exchange with another
Exchange rate
Refer to the international financial position of a country.
It is a bookkeeping for recording of all payments that have a direct daring on the movements of fun between the nation and a foreign countries.
Balance of payment
Promote stable growth in the international trade
International monetary fund
Maybe describe as a rental price of money usually expressed in annual percentage in nominal amount money borrowed.
Serves as a basis for comparing the returns offers by various financial.
Interest
Is a form of computing interest on annual basis.
Simple interest
This term refer to the average return on a debt security if kept until maturity.
Provided by the interest payment as well as capital gain or loss.
Yield to maturity
Refers to the promise annual interest payment from a bond divided by the market value on the bond
Current yield
These are the bonds which carry no interest but which are issued at a deep discount which provides capital gains when they are redeemed at face value.
Zero coupon bond
