Acronyms Flashcards
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Chapter 2: Standardised features set by exchange on futures contract.
FUTUrED TH
Form of quotation
Unit of trading
Tick size
Underlying security or index
Exact details of underlying asset
Trading hours
How settlement price is determined
(Customize this list for particular future)
Chapter 4: Forms of short term bank borrowing.
TRIBE
Term loan
Revolving credit (limit with fixed maturity)
International bank loan
Bridging loan
Evergreen credit (no maturity)
Chapter 4: Four issues differentiating between bank loans.
CMRS
Commitment
Maturity
Rate of interest
Security
Chapter 4: Types of swaps
VADER CAPS CDZ
Variance swaps
Asset return swaps
Deferred swaps
Extendible swaps
RPI and LPI swaps
Cross currency swaps
Amortising swaps
Puttable swaps
Step-up swaps
Constant maturity swap
Dividend return swap
Zero-coupon swap
Chapter 4: Disadvantages of Currency Swaps
CUB FEM
Counterparty credit risk
Unknown income hard to hedge
Bid/offer spread - extra cost compared to spot currency transactions
Favourable movements in exchange rate given up
Expensive - large principal amounts
Mismatch - real liabilities, eliminating purchasing power parity due to unexpected inflation differentials
Chapter 5: What areas are hedge funds less restricted on?
BUS
Borrowing (leverage)
Use of derivatives
Short-selling
Chapter 5: Five features originally characterised with hedge funds.
MATHH
Mix of investments (movements cancel…)
Aggressive position on assets
Trade in derivatives, commodities and non-income bearing assets
Higher level of borrowing
Higher risk tolerance
Chapter 5: Four types of hedge funds
GEMM
Global macro funds
Event driven funds
Market neutral funds
Multi-strategy funds
Chapter 5: Biases affecting hedge fund’s performance
SSM
Survivorship bias
Selection bias
Marking to market
Chapter 5: Four headings for key features of hedge funds.
MOPS
Management
Operations
Past performance
Strategies and investments
Chapter 5: Infrastructure characteristics
SPURM
Single purpose assets in nature
Participation for finite period
Upfront capital costs are high
Regulation varies depending on monopoly
Monopolies natural
Chapter 5: Specification of a commodity futures contract
CDM PDM Q
Contract size
Delivery date
Method of packaging
Package size
Delivery site
Method of resolving quality disputes
Quality of product
Chapter 6: Seven areas central banks are interested in
BIT PIMP
Banking regulation
Implementation of government borrowing
Taxation
Performance and integrity of financial markets
Intervention in currency markets
Monetary, interest rate and inflation policy
Printing and minting of notes and coins
Chapter 6: Four different features between investors
LATT
Liability profile
Appetite for risk
Taxation
Time horizon
List 10 forms of government policy
MT FINE PLCS
Monetary policy
Taxation
Fiscal policy
Investment policy
National debt management policy
Exchange rate policy
Prices and incomes policy
Labour policy
Competition policy
Social policy
