CISI

Question 1

A term used to describe the TAKEOVER or BUYING of a company by another

Answer 1

ACQUISITION

Question 2

Any item of ECONOMIC or FINANCIAL VALUE owned by someone or a company

Answer 2

ASSET

Question 3

The UK’s CENTRAL BANK. IMPLEMENTS ECONOMIC POLICY decided by the Treasury and DETERMINES INTEREST RATES.

Answer 3

BANK OF ENGLAND

Question 4

The SITUATION where an individual, company or other organization is UNABLE TO PAY its DEBTS.

Answer 4

BANKRUPTCY

Question 5

INTEREST-BEARING SECURITIES which entitle holders to annual interest and repayment at maturity. Commonly issued by both companies and governments.

Answer 5

BONDS

Question 6

CASH and ASSETS used to GENERATE INCOME or MAKE and INVESTMENT

Answer 6

CAPITAL

Question 7

An INCREASE in the MARKET VALUE of a SECURITY (ie, the value of the asset > the price they were bought)

Answer 7

CAPITAL GAIN

Question 8

Typically have responsibility for SETTING a NATION’S or a REGION’S short-term interest rate, controlling the money supply, acting as banker and lender of last resort to the banking system and managing the national debt.

Answer 8

CENTRAL BANK

Question 9

The PRICE of a SECURITY, such as a share or bond, at the END OF THE DAY

Answer 9

CLOSING PRICE

Question 10

A FUND RUN by a PROFESSIONAL MANAGER that ENABLES INVESTORS to POOL their MONEY. The manager selects the investments and the investors share in any increase (or decrease) in their value.

Answer 10

COLLECTIVE INVESTMENT SCHEME (CIS)

Question 11

CHARGES for ACTING as AGENT or BROKER

Answer 11

COMMISSION

Question 12

Amount of INTEREST PAID on a BOND

Answer 12

COUPON

Question 13

An ASSESSMENT of a bond issuer’s ABILITY TO PAY the interest and repay the capital on bonds. The best rating is TRIPLE A (AAA).

Answer 13

CREDIT RATING

Question 14

The likelihood of a borrower being UNABLE TO PAY the interest or repay the debt.

Answer 14

CREDIT RISK

Question 15

ANY FORM OF MONEY that CIRCULATES in an economy as an ACCEPTED MEANS OF EXCHANGE for goods and service.

Answer 15

CURRENCY

Question 16

GERMAN SHARES INDEX, comprising the largest companies (30 shares).

Answer 16

DAX

Question 17

An individual or firm ACTING IN ORDER TO BUY OR SELL a security for its own account and risk.

Answer 17

DEALER

Question 18

The SITUATION where a BORROWER has FAILED TO MEET THE REQUIREMENTS OF THEIR BORROWING, for example by failing to pay the interest due.

Answer 18

DEFAULT

Question 19

SUM OF MONEY HELD at a financial institution ON BEHALF of an account holder for SAFEKEEPING.

Answer 19

DEPOSIT

Question 20

Investment strategy of SPREADING RISK by investing in a range of investments.

Answer 20

DIVERSIFICATION

Question 21

DISTRIBUTION OF PROFITS by a company.

Answer 21

DIVIDEND

Question 22

Most recent dividend expressed s a PERCENTAGE OF CURRENT SHARE PRICE.

Answer 22

DIVIDEND YIELD

Question 23

Major share index in the USA, based on the prices of 30 major company shares.

Answer 23

DOW JONES INDUSTRIAL AVERAGE INDEX (DJIA)

Question 24

The ANNUALIZED COMPOUND RATE of INTEREST applied to a DEPOSIT or LOAN. Also known as the ANNUAL EQUIVALENT RATE (AER)

Answer 24

EFFECTIVE ANNUAL RATE

Question 25

Another name for SHARES or STOCK. It can also be used to refer to the amount by which the value of a house exceeds any mortgage or borrowings secured on it.

Answer 25

EQUITY

Question 26

MARKETPLACE for TRADING

Answer 26

EXCHANGE

Question 27

Rate at which ONE CURRENCY can be EXCHANGED for ANOTHER.

Answer 27

EXCHANGE RATE

Question 28

Also known as the PAR or NOMINAL VALUE. This is the AMOUNT that NEEDS to be REPAID on a BOND. It is also the amount USED to CALCULATE the COUPON PAYMENT (Face Value * Coupon Percentage = Coupon Payment)

Answer 28

FACE VALUE

Question 29

A MARKET for the trading of FOREIGN CURRENCIES

Answer 29

FOREIGN EXCHANGE MARKET

Question 30

Main UK share index of 100 leading shares

Answer 30

FTSE 100 ('FOOTSIE')

Question 31

A COLLECTIVE INVESTMENT SCHEME where money is COMBINED and INVESTED in a PORTFOLIO of shares with a common investment purpose.

Answer 31

FUND

Question 32

A firm that INVESTS MONEY on BEHALF of CUSTOMERS

Answer 32

FUND MANAGER

Question 33

A STATISTICAL MEASURE of the CHANGES in a SELECTION of stocks REPRESENTING a PORTION of the overall market

Answer 33

INDEX

Question 34

INCREASE in the GENERAL LEVEL of PRICES

Answer 34

INFLATION

Question 35

A new issue of ordinary shares, whether made by an offer for sale, an offer for subscription or a placing. Also known as a new issue.

Answer 35

INITIAL PUBLIC OFFERING (IPO)

Question 36

Price paid for borrowing money

Answer 36

INTEREST

Question 37

A business that specializes in raising debt and equity for companies.

Answer 37

INVESTMENT BANK

Question 38

A measure of the extent to which a company finances itself from debt, relative to equity.

Answer 38

LEVERAGE

Question 39

The ease with which an item can be traded on the market.

Answer 39

LIQUIDITY

Question 40

Companies whose securities are listed on the LSE and available to be traded

Answer 40

LISTING

Question 41

A form of debt where a borrower receives a certain amount of money from a lender. The borrower agrees to pay a contracted rate of interest to the lender and also agrees a dat on which the loan will be repaid.

Answer 41

LOAN

Question 42

Main UK market for securities

Answer 42

LONDON STOCK EXCHANGE (LSE)

Question 43

Electronic or physical meeting places where assets are bought or sold

Answer 43

MARKET

Question 44

Price of a share as quoted on the exchange

Answer 44

MARKET PRICE

Question 45

Date when capital on a bond is repaid

Answer 45

MATURITY

Question 46

The combining of two or more companies into one new entity

Answer 46

MERGER

Question 47

Long-term loan used to finance the purchase of a real estate.

Answer 47

MORTGAGE

Question 48

US market specializing in the shares of technology companies

Answer 48

NASDAQ (National Association of Securities Dealers Automated Quotations)

Question 49

A government's total outstanding borrowing resulting from financing successive budget deficits, mainly through the issue of government-backed securities.

Answer 49

NATIONAL DEBT

Question 50

Main Japanese share index, composed of shares in the largest 225 companies listed on the Japanese stock exchange.

Answer 50

NIKKEI 225

Question 51

The amount of a bond that will be paid on maturity. Also known as FACE or PAR VALUE

Answer 51

NOMINAL VALUE

Question 52

A form of borrowing form a bank where the lending bank can demand repayment at any time

Answer 52

OVERDRAFT

Question 53

Transactions that are undertaken away from an exchange

Answer 53

OVER-THE-COUNTER (OTC)

Question 54

A business that provides loans to individuals. They take an item of security (such as jewelry) in exchange to reclaim the items.

Answer 54

PAWNBROKER

Question 55

Very short-term loan that needs to be repaid on the borrower's next payday, usually the end of the month. Such loans are often very expensive

Answer 55

PAYDAY LOAN

Question 56

A fund set up by a company or government to invest the pension contributions of members and employees to be paid out at retirement age.

Answer 56

PENSION FUND

Question 57

A loan taken out by an individual where the precise purpose for which the money will be used is not detailed in the loan agreement

Answer 57

PERSONAL LOAN