Section 3.4: More Banking Matters?

Flashcards covering bank mediation, investing risks, and foreign currency calculations based on the Pincode 3GT curriculum.

How do banks act as intermediaries in the supply and demand for money?

Banks mediate between the supply of money (from households that save) and the demand for money (from households and companies that borrow).

What is the primary yield (opbrengst) and risk associated with investing in shares (beleggen)?

The yield is the share price gain (koerswinst), which can be high. The risks include a share price drop (koersdaling) or the company going bankrupt (faillissement), resulting in the shareholder losing their money.

What is the definition of the 'eurozone'?

The eurozone is the group of countries that use the euro.

According to the notes, what does the exchange rate (wisselkoers) indicate?

The exchange rate shows the value of $\operatorname{\in }1$ in foreign currency (vreemde valuta).

Using the provided formula, how do you calculate the amount of foreign currency received for an amount in euros?

$$\text{Amount foreign currency} = \text{amount in euros} \times \text{buying rate (aankoopkoers)}$$

If you want to buy Britse ponden for $\operatorname{\in }500$ and the buying rate is $0.89$, how many pounds do you receive?

$$500 \times 0.89 = 445\,\text{Britse ponden}$$

How do you calculate the amount in euros when buying foreign currency (aankoop)?

$$\text{Amount in euros} = \text{amount in foreign currency} \div \text{buying rate (aankoopkoers)}$$

How do you calculate the amount in euros when selling or exchanging foreign currency (verkoop)?

$$\text{Amount in euros} = \text{amount in foreign currency} \div \text{selling rate (verkoopkoers)}$$

If you buy $750\,\text{Amerikaanse dollars}$ at a buying rate of $1.10$, how many euros do you pay?

$$750 \div 1.10 = \operatorname{\in }681.82$$

If you exchange $125\,\text{Amerikaanse dollars}$ back to euros at a selling rate of $1.14$, how many euros do you receive?

$$125 \div 1.14 = \operatorname{\in }109.65$$