Prelims Flashcards
What are Capital Markets?
Financial markets where individuals, businesses, and governments can buy and sell various financial instruments such as stocks, bonds, currencies, and commodities, including derivatives.
What are the two components of Capital Markets?
- Primary markets
- Secondary markets
What is the primary market?
Markets where newly issued securities are bought and sold directly between issuers and investors.
What is the secondary market?
Markets where there is trading of existing securities among investors.
What are the main components of the Capital Market Structure?
- Stock Market
- Bond Market
- Derivatives Market
What does the Stock Market refer to?
The primary stock exchanges, namely, Philippine Stock Exchange (PSE) and Philippine Dealing Exchange (PDEX).
What is the Bond Market composed of?
- Government bonds
- Corporate bonds
- Retail treasury bonds
Who oversees government bond issuances in the Philippines?
The Bureau of Treasury.
What is the role of the Philippine Future Exchange (PFEX)?
Facilitates trading in financial derivatives, including stock index futures and options.
What is the primary regulatory authority overseeing capital markets in the Philippines?
Securities and Exchange Commission (SEC).
What does the Bangko Sentral ng Pilipinas (BSP) regulate?
The banking sector and non-banking financial intermediaries authorized to engage in capital market activities.
Who are the key players in Capital Markets?
- Investors
- Listed companies
- Brokerage Firms
- Investment Banks
What types of investors are included in Capital Markets?
- Individual retail investors
- Institutional investors like mutual funds
- Pension funds
- Foreign investors
What do Brokerage Firms do?
Facilitate the buying and selling of securities in the stock market.
What are the importance of Capital Markets in the Philippine economy?
- Capital Formation
- Diversification of Investment
- Foreign Investments
- Government Financing
- Economic Stability
What are the purposes of Capital Markets?
- Facilitating capital formation
- Providing investment opportunities
- Enhancing liquidity
- Price discovery
- Risk management
- Economic growth and development
- Government financing
- Wealth distribution and inclusivity
- Corporate governance and accountability
- Long-term investment
- Market efficiency
- Diversification and risk mitigation
- Foreign investment and global integration
- Financial education and awareness
- Regulatory framework
- Innovation and product development
- Economic resilience
- Job creation
- Infrastructure Development
- Environmental, social and Governanes Initiatives
- Technological Advancements.
- Global competitiveness
- Market Resilience
- Research and Analysis.
What does the Public Equity Market refer to?
Refers to stock Market
What is the Private Equity Market?
Refers to privately negotiated investments not publicly traded, particularly private equity firms and venture capital funds, in exchange for an ownership stake
What is meant by the Debt Market?
Refers to the buying and selling of debt instruments like bonds, notes and loans by governments and corporations
What does the Foreign Exchange Market deal with?
Dealing in the exchange of different national currencies
What are financial contracts that derive their value from an underlying asset called?
Derivatives Market
What types of instruments are included in the Derivatives Market?
- Options
- Futures
- Swaps
- Forwards
What is the purpose of the Derivatives Market for investors?
To hedge against fluctuations in prices, currencies, interest rates or commodities and provide opportunities for speculative trading
What does the Commodities Market refer to?
The trading of physical goods such as gold, oil, agricultural products and other raw materials
What is the Real Estate Market?
Refers to properties and land that are bought, sold or leased, either for residential, commercial or industrial purposes
How can investments in the Real Estate Market be made?
Directly or indirectly through Real Estate Investment Trusts (REITs) for rent or property appreciation
