Serves as a channel to transfer funds from individuals, private or public companies, and government agencies

(a)  

What are the basic functions of the Financial System?

(a)  

May be defined as the diversified financial activities being performed by the different economic units whose activities are so closely related to each other.

(a)  

It provides financial service conglomerates that combine investment banking, commercial banking, development banking, and insurance to encompass a wider variety of services.

(a)  

These banks are primarily concerned with the mobilization of savings and loans, and provide short-term working capital, medium, and long-term financing.

(a)  

It is a retail and commercial bank organized on a cooperative basis

(a)  

It has the function and purpose of conventional banking

(a)  

Is a financial institution controlled by the government. This kind of bank plays a special role in the economic deployment of one country.

(a)  

It is an enterprise whose function is to underwrite securities of another person or enterprise, including securities of government and private companies.

(a)  

These companies are engaged in the buying and selling of securities.

(a)  

Are companies that buy and sell stocks of other companies to resell them for a profit

(a)  

These are companies that provide insurance in case of loss to the insured individuals and firms.

(a)  

These are composed of member-owned producers and consumers. They are operated to promote thrift, short-term credit, and competitive rates and provide other financial services to its members.

(a)  

They are financial institutions that cater to financing to relatively low-income individuals

(a)  

They are also known as an indirect form of funds channeling

(a)  

It is a mechanism where buyers and sellers participate in the trade of financial assets such as stocks, bonds, currencies, and derivatives,

(a)  

Two types of Financial Markets

(a)  

This is a market intended for short-term placements.

(a)  

Is more for long-term financial instruments. This includes issuances of securities and long-term obligations by business and government agencies.

(a)  

It is a time deposit where the investor and the bank agree on the term of placement

(a)  

It is an unsecured promissory note with a fixed maturity of 1 to 270 days. It is a money market security issued by high credit rating companies to raise money to meet short-term obligations.

(a)  

It is a financial instrument in which one party sells a financial instrument to another party at a specified price with a commitment to repurchase the financial instrument at a fixed amount agreed at a specific date.

(a)  

It is an obligation by the national government.

(a)  

It is a bank draft where the bank is required to pay the holder a specified amount on a specific date.

(a)  

Is a private organization that provides and ensures a fair, efficient, transparent, and orderly market for the buying and selling of securities

(a)  

It is involved in the buying and selling of financial instruments but not in organized securities exchanges.

(a)  

Types of capital market

(a)  

It is a venue where firms and government agencies raise money using issuing financial instruments like stocks or bonds for the first time.

(a)  

Individual or firms who have excess funds and are willing to invest in the securities offered

(a)  

It is also called the aftermarket. It is the place where financial instruments already issued are traded.

(a)  

It is a place where long-term debt instruments are issued by firms and government agencies to raise money

(a)  

It is a place where raw or primary commodities are traded.

(a)  

It is a place where publicly listed stocks are bought and sold

(a)  

This provides instruments to manage financial risk.

(a)  

It is a global decentralized or over-the-counter market for the trading of currencies

(a)  

It is a hypothesis that serves as one of the foundations of modern finance theory.

(a)  

He is the most often thought of as the father of the efficient-market hypothesis.

(a)  

a universal bank is an example of (a)  

It is an obligation by the national government that matures in 91, 181 or 360 days. the interest is normally higher than the savings and time deposit

(a)  

It is a financial instrument that transpired from export and import transactions. It is less risky compared to other instruments because the payment of which is guaranteed by the importer's bank

(a)  

It determines how much funds will circulate from the savers to the users and it determines how financial instruments will be valued in the money and capital market.

(a)  

What are the factors affecting the supply of loanable funds?

(a)  

These are policies instituted by the government to support the economy as a whole

(a)  

-It refers to the uncertainty of fulfillment of the financial instruments when it is due.

-Refers to the uncertainty of not achieving what has been set to attain or to achieve.

(a)  

Also known as the cost of money, is the amount you are paying or receiving for the use of money.

(a)  

It refers to the investment opportunities in productive assets.

(a)  

It refers to the tendency of prices to go up over periods.

(a)  

Factors/Determinants of Nominal Interest Rate

(a)  

It is also known as treasury bills. This has a maturity of 91, 181, or 360 days.

(a)  

Also known as treasury note and treasury bond

(a)  

These are short-term securities issued by private companies

(a)  

These are long-term securities issued by private companies

(a)  

It is the rate of interest that exist on a riskless investment in the absence of inflation over the expected holding period

(a)  

Is the erosion of the purchasing power of currency associated with Investment

(a)  

It means that the lender has the possibility will not make a scheduled payment on the interest or principal.

(a)  

Refers to the capacity of an asset to be sold immediately

(a)  

It is a premium charged for the risks associated with the term of the security

(a)  

What are the three primary shapes of Term structure of interest rates

(a)  

This happens when long-term interest rates are higher than short-term interest rates. It is considered to be the normal slope of the yield curve and signals that the company is about to expand.

(a)  

It means that the short-term interest rates are higher than the long-term interest rates. It is also known as the inverted yield curve.

(a)  

It reflects that there is a similar borrowing costs between the short and the long-term activities

(a)  

consists of bills, and coins that are generally accepted as payment for goods and services

(a)  

is the exchange of goods and services without the use of the medium of exchange

(a)  

include gold, silver, corn, salt, leather, cattle, animal skin, copper, and many more

(a)  

What are the 3 main functions of money

(a)  

It means that money can be reliably saved, stored, and retrieved and still use as a medium of exchange

(a)  

Give the 7 characteristics of money

(a)  

is a paper asset sometimes called paper gold, created out of thin air by the IMF

(a)  

the country's central monetary authority, is an independent corporate entity and serves as the guardian of price and banking stability and plays an important role in the lives of all Filipinos.

(a)  

it exercises the powers and functions of the BSP, such as the conduct of monetary policy and supervision of the financial system.

(a)  

the monetary board meets every (a)  

can be defined as the management of the expansion and construction of the volume of money in circulation for the explicit purpose of attaining a specific objective

(a)  

it is where the commercial banks and other depository institutions, can borrow reserves from the central bank at a discount rate

(a)  

is the use of the budget of the government to achieve a full employment, control inflation, and stimulate economic growth

(a)  

refers to increases in government spending or decreases in taxes or both

(a)  

an increase in taxes or decrease in government spending or both

(a)  

is the deliberate manipulation of taxes and government spending by the government to alter real domestic output and employment etc.

(a)  

is the change in the government expenditures or taxes which occurs automatically as a result of existing law

(a)  

are changes in tax revenues or government spending which occur automatically during different phases of the business cycle

(a)  

refers to the budget deficit or surplus that would result with existing tax and spending programs

(a)  

is the notion that government borrowing to finance a deficit may crowd out or reduce private borrowing

(a)  

it refers to the relative strength of fiscal and monetary policy and its effect on different components of output

(a)  

This is the date where the terms and conditions of the financial instrument are stated such as the term to maturity, the amount to be invested, and the price agreed upon

(a)  

It is the date when the invested amount will start accruing interest. The value date of the financial instrument may or may not be the same as the transaction date

(a)  

This is the date where the contract is terminated or will end. The interest will stop accruing at the term of maturity as agreed upon between the parties

(a)  

• - These are short-term obligations issued by the government.

- are offered with a maturity of 91 days, 182 days, and 364 days

(a)  

It is issued by the banks to their depositors who would like to invest their excess mone for less than a year. These are bank placements withholding 30, 60, 90, 120 up to 360 days.

(a)  

These are unsecured promissory notes issued by firms with high credit standing. The interest earned is normally higher than the savings account

(a)  

suggests that it is a loan granted by one bank to another bank. This happens when one of the banks has surplus funds obtained from customers' deposits exceeded the demand for a loan and the other bank whose demand for funds on account of a loan request from their clients exceeded the availability of funds utilizing deposits will face a depletion of reserves

(a)  

It is a component of the money market that is borrowed or loaned for less than a week or normally on one banking day only.

(a)  

It is a loan payable on demand. Thus, the creditor can call the money or ask for payment anytime. It is normally practiced by large financial institutions, such as banks, mutual funds, and corporations, to borrow and lend money at interbank rates.

(a)  

To meet their short-term mismatches in fund positions the

participants in the money market borrow and lend from each other on an unsecured basis. This borrowing can be for overnight, for 2 to 14 days, or more than 14 days.

(a)  

It is part of the money market that is loaned or deposited for a fixed period. Normally it has a term of one week or one month.

(a)  

From the term itself, it is a loan borrowed in a day but subject to payment on the same day.

(a)  

It is a market for short-term deposits denominated in currencies and other easily convertible currencies other than the one in which the bank operates. It is the international equivalent of the domestic money market.

(a)  

It is the rate offered to Eurodollar funds offered in the international money market.

(a)  

is the average interest rate where major London banks or companies bid for Eurocurrency deposits from other banks in the interbank market. It is the rate charged to companies or banks who would like to borrow Eurocurrency.

(a)  

It is a rate used as a benchmark by banks in the British Sterling Market for transactions that happen between midnight and 4:15 PM.

(a)  

It is the weighted average overnight deposit rates for each business day of all unsecured euro cash transactions. The computed rate is used as a benchmark for euro transactions that occur between midnight and 4:00PM.

(a)  

This is used as a benchmark for the interest rate for the euro in the international money market. It is constructed from the average interest rate of eurozone countries offering short-term funds in the interbank market.

(a)  

is an effective overnight reference rate for the euro. It is compiled by taking the weighted average of all unsecured interbank lending transactions within the euro area

(a)  

is a long term debt in which the corporation that issued the bond owes the bondholder and is obliged to repay the principal at its face value on the maturity date and to make periodic interest payments etc.

(a)  

is the place where bonds are issued and traded

(a)  

are also called retail treasury bonds, treasury notes, t-bills and many other terms

(a)  

are issued by private or public corporations.

(a)  

The terms and conditions of the bond issuance. It describes the feature of bond issuance

• it is a legal document that contains the right of the bondholders and that of the corporations

It is the agreement as regards to nominal rate to be used in computing interest, and the amount of the principal to be paid on the maturity date.

(a)  

It is the price at which investors buy the bonds when they are first issued. The net proceeds that the issuer received are calculated as the issue price less the issuance fees.

(a)  

are part of bond indentures that restricts certain actions of the issuer to undertake further borrowings.

(a)  

These are the actions or conditions that the company should follow.

(a)  

These are actions or conditions that the company should not do.

(a)  

This is a provision that gives the right to the issuer of the bonds to call the bonds previously issued before the maturity date. It is said that the bonds were bought with a call option

(a)  

It is a provision that requires the issuing corporation to set aside an amount to pay off their bond issuances. The amount set aside is given to the trustee who then uses the funds to pay off, in part or in full, the debt.

(a)  

It is a situation where the bondholders have the right to sell the bonds back to the issuer before it matures. It is said that the bondholders have a put option to the bond. The put option is the right to sell to the issuer at a certain exercise price at a certain date. Thus, there is a prescribed period before the bondholder can exercise its right to sell.

(a)  

These are the types of bonds that mature on a single date. It usually requires firms to establish a sinking fund so that upon maturity, the firm will not encounter any difficulty in paying its maturing obligation.

(a)  

These are bonds wherein the principal amount matures in series rather than a single payment.

(a)  

are bonds issued with fixed assets pledged as collateral.

(a)  

are bonds issued with no collateral.

(a)  

This type of bond requires that the name of the bondholders be registered in the books of the corporation

(a)  

are bonds where a sheet of coupons is attached to the bond certificate. Each coupon represents an interest payment to be made from the date of issue to the date of maturity. Unlike in registered bonds, the issuing company does not know who the bondholders are when the bonds are sold or transferred.

(a)  

is a dealing exchange for major banks here in the Philippines. It was incorporated to provide trading infrastructure for fixed-income securities like bonds.

(a)  

when another company or an Individual, other than the issuing company, accepts a common obligation to pay the interest and principal in case of default

(a)  

These are bonds characterized by high-risk, high-yield bonds issued by companies that are heavily in debt or have an otherwise weak financial condition.

(a)  

It is a type of bond where the interest payment fluctuates due to the interest rate

(a)  

This is the risk that the return you earn on your investment does not

keep pace with inflation.

(a)  

This is the risk once the entire bond market declines. If this happens, the price of your bond investments will likely fall regardless of the quality or type of bonds you hold.

(a)  

If you buy bonds from a company or government that is not financially stable, there is more of a risk you will lose money

(a)  

It is the initial value of the bond. It is sometimes referred to as the principal or face value of the bond.

(a)  

It is the interest rate stated in the bond certificate. It is the basis for which the interest is paid until it matures.

(a)  

This is the actual rate received by the bondholder.

(a)  

It is the final date on which repayment of the bond principal is due.

(a)  

is a bond that bears no interest but is sold at a very deep discount.

(a)  

is the expected rate of return if the bond was held up from the time it was purchased until its maturity date.

(a)  

is a provision that gives a right to the issuer of the bonds to call the bonds previously issued before the maturity date.

(a)  

also known as bond refinancing, refers to the issuance of new bonds to pay off their outstanding bonds

(a)  

measures the sensitivity of the price of the bond as brought by the change in the interest rates. It is measured by how long it will take in terms of years for the investor to repay the price of the bond by the bond's total cash flows

(a)  

are long-term bonds issued by the government or corporations in another country. The currency to be used is the currency where the bonds are issued.

(a)  

are bonds issued and sold outside the country with currencies other than the currency in which the bond is denominated.

(a)  

what are the 4 valuation of bonds

(a)  

give the 4 risk of investing in bonds

(a)  

what are the loans offered in the interbank money market (5)

(a)