Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

CWM Financial Markets > Last minute stuff > Flashcards

Last minute stuff Flashcards

1
Q

What are most corporate bonds issued as?

A

Debentures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are debentures?

A

IOUs from the company

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What sets out whether a charge is fixed or floating?

A

The deeb of debenture

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is a charge?

A

Collateral using an asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a fixed charge

A

A charge over a defineable asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What can’t a lender do to the fixed asset?

A

Cannot sell it (release it from its charge) without lender permission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How can a lender sell a fixed asset?

A

Offering to replace the charge with an equal or better asset

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What can a lender do if the borrower defaults? (fixed charge)

A

1) Appoint a receiver and generate income
2) Take control and sell it

any excess from sale must be returned to company.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is a floating charge

A

an equitable charge on the companies assets - present and future

Company can still use assets whlist under charge

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Why is a floating charge useful?

A

can borrow without having to pledge specific securities (and be prevented from disposing of them)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What happens to a floating charge if the borrower defaults?

A

Fixes on their assets at that point

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What ranks higher in liquidation? Fixed or floating charge

A

Fixed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What are the requirements for a main market LSE listing? (5)

A

1) £30m min market cap - 10% free float
2) £200k minimum bonds (if in issue)
3) Freely transferable securities
4) Statement of going concern
5) 3yr Trading History

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the requirements for an AIM LSE listing?

A

1) Appoint a NOMAD
2) Appoint a nominated broker
3) Disclose price sensitive information to market
4) Publish annual and interim accounts within time frames
5) Disclose notifiable interest within 2 working days

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is a notifiable interest?

A

> 3% of a companies voting rights owned

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Give 4 examples of types of dual listing

A

1) UK and US (Vodafone)
2) HK and UK (and US ADR) - HSBC
3) A Shares & H Shares in China
4) NYSE & Regional Exchange

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Benefit of dual listing?

Why might this not be the case?

A

1) Improved liquidity

Most dual issues primarily trade on one market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What applies to companies dual listing in the US?

A

Sarbanes-Oxley (SOX)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does SOX aim to do?

A

Protect consumers by improving the standard of corproate disclosures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What UK firms are subject to SOX?

A

Vodafone, Prudential, HSBC, Shell, BP.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Brazilian Index Name?

A

Bovespa

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

How many stocks on Bovespa?

What do the stocks on Bovespa Represent?

How often is Bovespa updated?

A

90 Stocks

80% of trading volume over past 12 months

Quarterly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Main Russian exchange?

A

Moscow Exchange Group

Merger between MICEX and RTS

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What two things trade on MEG?

A

1) Equity (ETF, Shares, DRs) Settle T+2
2) Debt (Corp, Govt, Muni) T+0

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
What russian debt does not settle T+0?
OFZs : Ruble Denominated T Bills
18
MEG after 2022?
HMRC revoked RSE status
19
Two indian exchanges?
BSE NSE - National stock exchange
20
BSE:
1) Oldest in Asia 2) Helped develop Indian Markest 3) >5000 companies 4) Sensex Index
21
BSE List requirements
1) 10 crore IPO 2) 3 crore follow up 3) 25 crore market cap 4) 10 crore min issue
22
NSE:
1) Automated / Screen Based 2) 2000 Listings 3) Equity + Debt & Expanded to derivative offerings 4) Nifty 50
23
National Securities Depository Limited (NSDL)
NSE helped create india's first CSD
24
Two chinese markets?
SSE - shanghai SZSE - shenzhen
25
A shares? B shares? H shares?
a shares - RMB denom, china resi's only or QFII b shares - foreign investors / resi's with foriegn accounts h shares - china companies listed on SEHK - trade in HKD ## Footnote A+H shares common for dual listing
26
What does QFII stand for?
Qualified Foreign Institutional Investors
27
QFII?
single qfii cannot hold more than 10% (a share) all qfii cannot hold more than 30% (a shares) expanded in 2014 & 18 aim to increase foreign investment (increased quota)
28
2 south african exchanges?
JSE ALT-X
29
JSE?
Established following gold rush was open out cry changed to ECN 1996 Equities, bonds, derivatives, commodities ## Footnote 400 companies JSE and Alt x
30
alt x?
South african SMe / growth exchange
31
Benefits of EM investing?
1) Greater growth (have to catch up to DMs) 2) Diversifcation (globalisation) 3) Underpriced 4) Different industries 5) ineffcient pricing (mispricing)
32
Drawbacks / Risks of EM investing?
1) Volatility 2) Liquidity 3) Taxation 4) Repatriation 5) Lack of Regulation 6) Controls on foreign ownership 7) Settlement and Custody 8) Currency Risk
33
What is PIMFA
Personal Investment Management & Financial Advice Association
34
What is PIMFAs overall aim?
Create an optimal opearting environment members can then deliver the best service to their clients to help saving and investment
35
PIMFA aims (6)
1) Represent the diverse range of firms by providing a unified voice 2) Provide leadership by consolidating knowledge and expertise 3) Create a culture of saving and investment in the UK 4) Lead debate on policy and regulation -> maintain UK as centre of exellence 5) Promote better understanding of sector -> help people invest for future 6) Develop best guidance for practice (through dialogue with stakeholders)
36
What is earnings yield?
A valuation measure - high yield is overpriced - low yield is underpriced Market could expect high yield to have better growth & low yield to have poor future performance
37
What is dividend cover?
An affodability measure Are the company paying a dividend out of earnings or reserves?
38
What is a good dividend cover?
Above 2 is considered prudential
39
What can a cap be thought as?
A call on interest rates
40
What can a floor be thought as?
A put on interest rates?
41
When would you use a cap?
Lending or borrowing @ floating rate - limit max interest payment
42
What are the benefits of a cap?
Limits highest level of borrowing / lending Cost is known up front
43
When is a floor used?
Borrowing and want to guarentee a minimum level of return
44
Benefits of a floor?
Lowel levels of return known Cost of protection is known
45
What is a bill of exchange?
An IOU from a customer to a supplier for goods Promises to pay at a fixed future date Guarenteed by a bank for a fee
46
Why does a bill of exchange need to be guarenteed?
Otherwise it is an IOU with no security / promise Bank guarentee will ensure payment if the customer defaults
47
What is the process involved in a bill of exchange?
1) Supplier sells goods 2) Customer creates bill and gets guarenteed by bank for a fee 3) Customer gives supplier the note 4) Supplier can hold on to it and receive full amount in x days 5) Or sell it in money markets today for a discount The buyer of the bill will receive the full amount at the future date instead.
48
What is behavioural finance?
A field of study which aims to explain investors decision making processes and actions (as well as the market as a whole) It combined classical economics with psychology
49
What is the under pinning tenant of BF?
Investors are not rational (opposite to what the EMH says)
50
What do irrationalities lead to?
Cognitive Biases Which themselves lead to sub-conscious shortcuts (bad performance and decisions)
51
What are the 4 cognitive biases
1) Loss Aversion 2) Anchoring 3) Overconfidence 4) Herd Mentality
52
Loss Aversion What it is: What is causes: How it is overcome:
Pain from loss 2x pleasure from a gain (equal amounts) Investors hold onto losing investments Overcome by not getting emotionally attached to investments
53
Overconfidence What it is: What is causes: How it is overcome:
Investors exaggerate their ability / skills Causes overtrading and undiversifeid positions Overcome by investing more and trading less
54
Herd Bias What it is: What is causes: How it is overcome:
Investors follow the popular decisions due to societal pressures Makes bad decisions seem less incorrect Self-discipline & conducting own research
55

CWM Financial Markets (58 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions