Monetary Financial Theory Practice Flashcards

A set of vocabulary flashcards based on the lecture notes for Monetary Financial Theory at Hanoi University of Science and Technology, covering financial activities, interest rates, banking institutions, and state budgets.

Financial Activity

The activities involving the primary distribution and redistribution of the total social product under the form of value.

Expanded Form of Value

A stage in the development of value that appeared after the second social division of labor.

M2 Money Supply

A broad classification of money that includes cash, demand deposits, and time deposits.

Financial System

A system where financial intermediaries and financial markets play the main roles in circulating capital from surplus units to deficit units.

Banknotes (Giấy bạc ngân hàng)

A type of credit money (tín tệ) that originates through credit activities and is recorded on bank account systems.

Medium of Exchange

According to modern economists, this is the most important function of money.

Expectations Theory of Term Structure

A theory stating that long-term interest rates depend on the investor's expectations of future short-term interest rates.

Present Value Calculation

The formula to find the amount to deposit today ($PV$) to receive a future value ($FV$) after $n$ years at interest rate $i$ is $PV = \frac{FV}{(1+i)^n}$. For $FV = 50000$, $n = 7$ years, and $i = 10\%$, the amount is approximately $25659.91$.

Interbank Interest Rate

The interest rate applied to loans made between commercial banks.

Prime/Basic Interest Rate (Lãi suất cơ bản)

A key interest rate determined and announced by the central bank that dominates and influences other interest rates.

Interest Rate and Bond Price Relationship

An inverse relationship where the market price of a bond will decrease if market interest rates increase.

Shareholders in Bankruptcy

The parties who are paid their share last in the event of a company's liquidation or bankruptcy.

Primary Market

The market where the main function is to increase capital for the issuer of securities.

Asset Safety Ranking

The order of financial instruments from most to least safe is (1) Treasury bills, (2) Certificates of deposit, (3) Bank bonds, and (4) Stocks.

Commercial Bank (NHTM) Functions

The functions of creating deposits, acting as a payment intermediary, and acting as a credit intermediary.

Asset Business (Nghiệp vụ tài sản Có)

The business operations of a commercial bank related to the use of capital.

Liabilities (Tài sản Nợ)

The section of a bank's balance sheet that indicates the origin or source of the funds.

Time Deposits

Funds deposited by customers that are considered a debt/liability of the bank.

Regular State Budget Revenue

Income sources including taxes, property ownership, fees, charges, and state dividends.

Budget Deficit Solutions

Methods such as increasing taxes, issuing money, and borrowing domestically or internationally through the issuance of government bonds and treasury bills.

State Budget (Ngân sách Nhà nước)

A plan of estimated revenues and expenditures of a state within a specific period.

Capital Budgeting Decision

A company's decision regarding investment, also referred to as an investment decision.

Working Capital (Vốn lưu động)

Capital that changes form during circulation, transfers its entire value in one cycle, and completes its round after one business cycle.

Corporate Finance

A system of economic and monetary relations involving distribution in value form linked to the creation and use of funds to achieve business goals.

Required Reserves

The amount of money commercial banks are required to hold at the Central Bank.

Tight Monetary Policy

A policy characterized by signs such as increasing the discount rate and increasing the required reserve ratio.

Open Market Operations (OMO)

A tool used to regulate intermediate targets that can be implemented quickly with low cost and time.