Week 1 Flashcards
When did the S&P500 fall the fastest and how many days did it take to enter bear market.
During COVID-19 and it took less than 50 days.
Credit and the funds come from which 3 locations and what products to they sell (2 products each).
- Capital markets and shadow banks
Government and Corporate bonds
Commercial paper
- Banks
Loans
Interbank market
- Foreign exchange market
Currencies
International capital flows
What is the bond investor consensus on UK Gilts
Negative
What has happened to the loan market and why recently?
Due to rates being pushed up the demand for loans has reduced.
Why did the Euro & US dollar daily sport fall against pound sterling in September of 2022
This was due to Liz Truss mini budget experiment.
What is money supply?
It is anything that is generally accepted as payment for goods or services or in the repayments of debts.
What 2 concepts does money have?
Wealth which is a stock concept
Income which is a flow concept
What are the 3 functions of money and briefly describe them.
- Medium of exchange
- Standardised
- Widely accepted
- Divisible
- Ease of carry
- Does not deteriorate
- Unit of account
- reduces transaction costs
- Store of value
- Saves purchasing power over time
What is liquidity?
The ease and speed with which an asset can be converted into a medium of exchange.
What is commodity money?
Valuable money that is easily standardized and divisible.
What is representative money?
Money whose value is from an underlying commodity it represents.
What is fiat money?
It is paper money decreed by governments as legal tender.
What are cheques?
They are instructions to banks to transfer money from your account.
What is E-Money?
It is money that exists only in electronic form.
What are the money aggregates in the UK?
