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FINANCIAL MARKET > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

It allows for the exchange of funds between financial market participants such as lenders, investors and borrowers

A

Financial system

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2
Q

operate at the national and global levels

A

financial systems

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3
Q

is a combination of people, institutions, businesses, and processes that facilitate financial transactions

A

financial systems

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4
Q

example of international financial institutions

A

world bank
international monetary funds
asian development bank

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5
Q

example of domestic financial institutions

A

bdo
pse
tagum cooperative

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6
Q

funds are sourced from banks and other financial intermediaries

A

formal financial sector

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7
Q

funds are sourced from family, friends, relatives and private creditors

A

informal financial sector

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8
Q

facilitates the proper movement of funds from lenders to borrowers

A

robust formal financial sector

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9
Q

participate in financial markets as the biggest source of funds and acquire money to finance the acquisition of personal assets

A

household

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10
Q

participate in the financial markets by acquiring loans to finance business activities such as daily operations, corporate expansions etc.

A

businesses/firms

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11
Q

participates in financial markets by borrowing from domestic and international entities to finance public services

A

government

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12
Q

Businesses sells its stocks and/or bonds directly to savers without a financial intermediary

A

direct transfers

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13
Q

Businesses sells its stocks and/or bonds through an investment bank. The investment bank subsequently sells it to savers/depositors

A

indirect transfer through investment banks

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14
Q

Businesses sell their stocks and/or bonds through a financial intermediary (i.e. commercial banks). Financial intermediaries sell it’s own securities to savers/depositors

A

indirect transfer through financial intermediary

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15
Q

BUSINESS > securities > SAVERS > dollars > BUSINESS

A

Direct transfer

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16
Q

BUSINESS > securities > INVESTMENT BANKING HOUSES > securities > SAVERS > dollars > INVESTMENT BANKING HOUSES > dollars > BUSINESS

A

indirect transfer through investment bankers

17
Q

BUSINESS > business’ securities > FINANCIAL INTERMEDIARY > intermediary’s securities > SAVERS > dollars > FINANCIAL INTERMEDIARY > dollars > BUSINESS

A

indirect transfer through a financial intermediary

18
Q

Markets that sell tangible products such as agricultural produce, automobiles, real estate and electronics

A

physical markets

19
Q

Markets that sell financial securities such as stocks, bonds, mortgages etc.

A

financial markets

20
Q

Markets that sell short-term, highly liquid debt securities. Money markets include treasury bills and commercial papers

A

money markets

21
Q

Markets that sell intermediate and long-term securities such as corporate bonds and stocks

A

capital markets

22
Q

help corporations design securities to attract investors, buy these securities and resell them to savers.

A

investment bank

23
Q

caters to certain financial services such as savings, checking and time deposits

A

commercial banks

24
Q

Large conglomerate that combine many financial institutions within a single corporation

A

financial services corporations

25
Q

Accept money from savers then use it to buy securities to reduce risks through diversification

A

mutual funds

26
Q

Accepts deposits from savers and issue mortgage loans to borrowers

A

savings and loans associations

27
Q

Pays the beneficiary of an insured person after death in exchange for premiums paid during the lifetime of the insurer

A

life insurance companies

28
Q

example of financial institutions

A

manulife
metrobank
fami mutual funds
bpi

29
Q

TREASURY BILLS
market
participants
riskiness
maturity

A

money market
government
default free
91 days to 1 year

30
Q

COMMERCIAL PAPERS
market
participants
riskiness
maturity

A

Money
private corporations
low default risk
270 days

31
Q

CORPORATE BONDS
market
participants
riskiness
maturity

A

capital
private corporations
more risk than treasury but less risk than stocks
up to 40 years

32
Q

PREFERRED STOCK
market
participant
riskiness
maturity

A

capital
private corporations
more risk than corp. bonds but less risk than common stock
unlimited

33
Q

COMMON STOCK
market
participants
riskiness
maturity

A

capital
private corporation
risky
unlimited

34
Q
A

FINANCIAL MARKET (6 decks)

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