Lesson 123

Question 1

defined as accumulated wealth that is available to create further wealth.

Answer 1

Capital

Question 2

takes many forms in the capital markets and financial institutions play a critical role
in assessing, managing and distributing risk.

Answer 2

Risk

Question 3

In finance, it is the market for eurocurrencies: these are all currencies that are
held as deposits by companies or individuals outside of their country of issue.
2. In commerce, it refers to the single market of the European Union (EU) in
which goods and services are freely traded between member countries, and
which have a common trade policy with non-EU countries.

Answer 3

Euromarket?

Question 4

is the biggest financial center in the world, many of the
developments that led to today’s international marketplace for money actually originated
in London

Answer 4

New York

Question 5

is a leadingfinancial servicescompany, advising clients in
all aspects of finance, across the globe and around the clock.

Answer 5

Credit SuisseGroup

Question 6

k is a bank that combines the three main services of banking
under one roof.

Answer 6

universal bank

Question 7

refers to a financial institution that accepts deposits,
offers checking account services, makes various loans, and offers basic financial
products like certificates of deposit (CDs) and savings accounts to individuals
and small businesses.

Answer 7

commercial bank

Question 8

is where most people do their banking.

Answer 8

commercial bank

Question 9

is a type of foreign entity that is located and incorporated in
a foreign country but is either wholly-owned or owned in a major part by
a parent corporation in a different nation.

Answer 9

subsidiary bank

Question 10

only have to operate under the laws and regulations of the host
country.
•This particular banking model helps the parent company avoid unfavorable
regulations enforced by the home country.

Answer 10

subsidiary bank

Question 12

are typically unable to offer a full suite of retail banking
services.

Answer 12

•Subsidiary banks

Question 13

also known as consumer banking or personal banking, is
banking that provides financial services to individual consumers rather than businesses

Answer 13

Retail banking,

Question 14

is a way for individual consumers to manage their money, have
access to credit, and deposit their money in a secure manner.

Answer 14

Retail banking

Question 15

refers to banking services sold to large clients, such as
other banks, other financial institutions, government agencies, large
corporations, and real estate developers.

Answer 15

Wholesale banking

Question 16

refers to banking services sold to large clients, such as
corporations, other banks, and government agencies.

Answer 16

Wholesale banking

Question 17

is the process through which an individual or institution takes
on financial risk for a fee.

Answer 17

Underwriting

Question 18

markets for borrowing and lending funds over the short
term.

Answer 18

money markets

Question 19

which is an international market in which banks take deposits and
make loans in a range of currencies outside the home country for those currencies and
out with the direct regulatory control of the central banks responsible for those
currencies.

Answer 19

Eurocurrency market

Question 20

et is a financial market within a given country for products
and services.

Answer 20

domestic market

Question 21

is defined geographically as a market outside the
international borders of a company’s country of citizenship

Answer 21

International market

Question 22

are short-term negotiable securities issued in their domestic money
markets by governments such as the US, the UK, France and Germany.

Answer 22

TREASURY BILLS

Question 23

(or T-Bills for short) are a short-termfinancial
instrumentthat is issued by the US Treasury with maturity periods ranging
from a few days up to 52 weeks (one year).

Answer 23

Treasury Bills

Question 24

bills are sold at a discount to thepar value, which is its actual
value.

Answer 24

Treasury bills

Question 25

is the nominal or face value of a bond, share of stock, or coupon as indicated on a bond or stock certificate.

Answer 25

Par value

Question 26

the investor agrees to accept the discount rate determined at auction.

Answer 26

Non-competitive bid

Question 27

investors buy T-bills at a specific discount rate that they are willing to accept.

Answer 27

Competitive bidding auctions

Question 28

Investors can buy or sell Treasury bills

Answer 28

Secondary market

Question 29

where investors buy and sell securities from other investors (think of stock exchanges).

Answer 29

secondary market

Question 30

are trade-related negotiable bills issued by companies but accepted or guaranteed by a bank in return for a fee. They can be freely traded in the secondary market.

Answer 30

BANKERS’ ACCEPTANCES

Question 31

The accepting bank guarantees that the face value of the bill will be paid at maturity.

Answer 31

Bankers’s acceptances

Question 32

are backed by documentation such as invoices held by the accepting bank. The instrument traded in the secondary market will often simply be a note briefly describing the underlying commercial trade and specifying the name of the accepting bank.

Answer 32

Bankers’s acceptances

Question 33

is a negotiable piece of paper that functions like a post-dated check.

Answer 33

Banker's acceptance

Question 34

is a written order used primarily in international trade that binds one party to pay a fixed sum of money to another party on demand or at a predetermined date.

Answer 34

bill of exchange

Question 35

refers to trading in very short-term debt investments. At the wholesale level, it involves large-volume trades between institutions and traders.

Answer 35

money market

Question 36

is a form of payment that is guaranteed by a bank rather than an individual account holder. •The bank guarantees payment at a later time most frequently used in international trade to finalize transactions with relatively little risk to either party. traded at a discount in the secondary money markets. •Thus, unlike a post-dated check, BAs can be investments that are traded, generally at a discounted price (similar to Treasury bills).

Answer 36

Banker's Acceptance

Question 37

economics, refers to how different industries are classified and differentiated based on their degree and nature of competition for goods and services. It is based on the characteristics that influence the behavior and outcomes of companies working in a specific market.

Answer 37

Market Structure

Question 38

is the trading of one currency for another. For example, one can swap the U.S. dollar for the euro. can take place on the foreign exchange market, also known as the forex

Answer 38

Foreign Exchange

Question 39

s the largest, most liquid market in the world, with trillions of dollars changing hands every day.

Answer 39

forex market

Question 40

a global market for exchanging national currencies with one another.

Answer 40

Foreign Exchange

Question 41

an individual or firm that acts as an intermediary between an investor and a securities exchange.

Answer 41

broker

Question 42

a deal between two parties. A broker generally never buys or sells stocks himself, being instead the middleman between the investor and the market, and either sending an order to a market where it can be executed or finding the other party to the trade directly.

Answer 42

broker

Question 43

instead, is usually on the other side of the trade and you will be buying or selling with the dealer himself as the counterparty.

Answer 43

dealer,

Question 44

a stock typically refers to the stock of a small company that trades for less than $5 per share.

Answer 44

Penny stocks -

Question 45

working for banks tend to specialize in one or more of a small group of closely related currency pairs.

Answer 45

FX dealers

Question 46

Danish investment bank specializing in online trading and investment.

Answer 46

Saxo Bank i

Question 47

UK-based financial services company that offers online trading in shares, spread betting, contracts for difference (CFDs) and foreign exchange across world markets.

Answer 47

CMC Markets

Question 48

is any of various types of wagering on the outcome of an event where the pay-off is based on the accuracy of the wager, rather than a simple "win or lose" outcome

Answer 48

Spread betting i

Question 49

is the wagering something of value ("the stakes") on an event with an uncertain outcome with the intent of winning something else of value

Answer 49

Gambling

Question 50

is a contract between two parties, typically described as "buyer" and "seller", stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time (if the difference is negative, then the seller pays instead to the buyer).

Answer 50

contract for difference (CFD)

Question 51

a dedicated forex broker, regulated in multiple countries. founded in 2001 as part of GAIN Capital Holdings, is an established global online broker that caters to individuals seeking to trade the retail FX

Answer 51

Forex.com

Question 54

co-founded by Dr. Stumm and Dr. Olsen in 1996, advertises that it does “all things currency,” from currency conversion to providing FX data services for businesses to offering an established global online brokerage service to individuals seeking to trade the retail FX

Answer 54

Oanda

Question 55

transaction, also known as FX spot, is an agreement between two parties to buy one currency against selling another currency at an agreed price for settlement on the spot date.

Answer 55

Foreign exchange spot

Question 56

is the current price level in the market to directly exchange one currency for another, for delivery on the earliest possible value date.

Answer 56

Spot exchange rate

Question 57

refers to the day when a spot transaction is typically settled, meaning when the funds involved in the transaction are transferred.

Answer 57

Spot date