FMGT 80 CAPITAL MARKEST MANAGEMENT (MIDTERM EXAM TEST SAMPLE)

studied byStudied by 45 people
5.0(1)
get a hint
hint

MONEY

1 / 65

Tags & Description

Studying Progress

0%
New cards
66
Still learning
0
Almost done
0
Mastered
0
66 Terms
1
New cards

MONEY

a liquid asset used to facilitate transactions of value. It is used as a medium of exchange between individuals and entities.

New cards
2
New cards

LIQUIDITY

ease of converting an asset into cash without loss; the depth of a financial market.

New cards
3
New cards

BANGKO SENTRAL NG PILIPINAS (BSP)

the only authorized government entity to print money and is responsible for the proper administration of the monetary banking credit system of the republic to achieve monetary stability and create conditions conducive to economic developments.

New cards
4
New cards

MONEY SUPPLY

total amount of money—cash, coins, and balances in bank accounts—in circulation.

New cards
5
New cards

INTEREST

cost of credit; it is the price paid for the use of someone else's money

New cards
6
New cards

RATE OF INTEREST

the amount a lender charges a borrower and is a percentage of the principal—the amount loaned).

New cards
7
New cards

BASIS POINT

term used in finance to refer to changes in values or interest rates.

New cards
8
New cards

YIELD CURVE

illustrates the structure, which relates the yield on debt instruments with different terms of maturity.

New cards
9
New cards

FINANCIAL MARKETS

Refer broadly to any marketplace where the trading of securities occurs, including the stock market, bond market, forex market, and derivatives market, among others.

New cards
10
New cards

FINANCIAL INTERMEDIARIES

An entity that acts as the middleman between two parties in a financial transactions, such as commercial bank, investment banks, mutual funds and pension funds.

New cards
11
New cards

COMMERCIAL BANKS

The most important depository institution in terms of size. Also a prime source of funds to consumers.

New cards
12
New cards

CERTIFICATE OF DEPOSIT

time deposit issued by a bank with a specified interest rate and maturity.

New cards
13
New cards

LONG-TERM NEGOTIABLE CERTIFICATE OF DEPOSIT

a bank product offered to investors looking for a relatively safe investment, but with higher interest rates than a regular savings account or short-term time deposit.

New cards
14
New cards

THRIFT INSTITUTIONS

A place for savers, especially individuals with modest sums, to deposit funds.

New cards
15
New cards

MUTUAL SAVINGS BANKS

owned by its depositors, but the bank itself is managed by a board of trustees.

New cards
16
New cards

SAVINGS AND LOAN ASSOCIATIONS

Primarily as a source of mortgage loans and has evolved into a thrift institutions that accepts deposits from anyone and makes a variety of loan.

New cards
17
New cards

REQUIRED RESERVES

funds that banks must hold against deposit liabilities. The minimum amount that all banks must maintain as a reserve is determined by the Monetary Board

New cards
18
New cards

RESERVE REQUIREMENTS

refer to the percentage of bank deposits and deposit substitute liabilities that banks must set aside in deposits with the BSP which they cannot lend out, or where available through reserve-eligible government securities.

New cards
19
New cards

DEPOSIT SUBSTITUTES

defined as an alternative form of obtaining funds from the public, other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the borrower's own account, for the purpose of relending or purchasing of receivables and other obligations.

New cards
20
New cards

EXCESS RESERVES

reserves held by a bank in excess of those it must hold to meet its reserve requirements.

New cards
21
New cards

CORRESPONDENT BANK

a bank that provides services on behalf of another, equal or unequal, financial institution. It can facilitate wire transfers, conduct business transactions, accept deposits, and gather documents on behalf of another financial institution.

New cards
22
New cards

SECONDARY RESERVES

Short-term securities especially Treasury bills, held by banks to increase their liquidity

New cards
23
New cards

DEPOSIT INSURANCE

essentially the assured amount a bank depositor gets in the case that the bank cannot fulfill its obligations. It is mandatory by law and is designed to maintain financial stability.

New cards
24
New cards

PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC)

pays deposit insurance on all valid deposits up to Maximum Deposit Insurance Coverage (MIDC) of P500,000 per depositor of a closed bank.

New cards
25
New cards

MONETARY POLICY

set of actions to control a nation's overall money supply and achieve economic growth.

New cards
26
New cards

LIFE INSURANCE COMPANIES

also performs the role of a financial intermediary because they receive the funds of savers, create a claim on themselves, and lend the funds to borrowers.

New cards
27
New cards

PENSION PLAN

a retirement plan that requires an employer to make contributions to a pool of funds set aside for a worker's future benefit.

New cards
28
New cards

PERSONAL EQUITY RETIREMENT ACCOUNT (PERA)

is a voluntary retirement contribution plan that gives you the freedom to save and invest up to PhP100,000 annually. Also, the returns are completely tax-free.

New cards
29
New cards

MONEY MARKET MUTUAL FUND

type of mutual fund that invests in high-quality, short-term debt instruments, cash, and cash equivalents.

New cards
30
New cards

UNDERWRITING

purchase of an issue of new securities for subsequent sale by investment bankers; the guaranteeing of the sale of a new issue of securities

New cards
31
New cards

MERGER AND ACQUISITION

consolidation of companies or their major business assets through financial transactions between companies.

New cards
32
New cards

FINANCIAL ADVISOR

offer valuable advice to their clients

New cards
33
New cards

ASSETS MANAGEMENT

the practice of increasing total wealth over time by acquiring, maintaining, and trading investments that have the potential to grow in value.

New cards
34
New cards

FULL UNDERWRITING BASIS

Underwriter or Underwriting Syndicate commits to purchase full amount of securities issuance from Issuer.

New cards
35
New cards

BEST EFFORTS BASIS

Underwriter or Syndicate will use "best efforts " to sell or distribute securities only with no commitment for full amount to be issued.

New cards
36
New cards

ORIGINATING HOUSE

investment banker who makes an agreement to sell a new issue and forms a syndicate to sell the securities.

New cards
37
New cards

SYNDICATE

a group of brokerage houses that joins together to underwrite and market a specific sale of securities.

New cards
38
New cards

LEAD UNDERWRITERS

the firms that manage the sale of securities

New cards
39
New cards

EFFICIENT CAPITAL MARKET

security prices adjust rapidly to the arrival of new information, therefore current prices if securities reflect all information about security.

New cards
40
New cards

RANDOM WALK HYPOTHESIS

Changes in security prices occur randomly

New cards
41
New cards

FAIR GAME MODEL

current market price reflect all available information about a security and the expected return based upon this price is consistent with its risk.

New cards
42
New cards

EFFICIENT MARKET HYPOTHESIS (EMH)

divided into three subhypothesis depending on the information set involved.

New cards
43
New cards

WEAK FORM

Prices reflect all security-market information

New cards
44
New cards

SEMI-STRONG FORM

Prices reflect all public information

New cards
45
New cards

STRONG FORM

Prices reflect all public and private information

New cards
46
New cards

STOCK EXCHANGE SPECIALIST

Specialists were responsible for facilitating the trade of a given stock by selling their own stock inventory when there was a large shift in demand, thus ensuring market liquidity.

New cards
47
New cards

SECURITY ANALYST

a financial professional who studies various industries and companies, provides research and valuation reports, and makes buy, sell, and/or hold recommendations.

New cards
48
New cards

PROFESSIONAL MONEY MANAGERS

is a person or financial firm that manages the securities portfolio of individual or institutional investors.

New cards
49
New cards

MENTAL ACCOUNTING

refers to the propensity for people to allocate money for specific purposes.

New cards
50
New cards

HERD BEHAVIOR

states that people tend to mimic the financial behaviors of the majority of the herd.

New cards
51
New cards

EMOTIONAL GAP

refers to decision-making based on extreme emotions or emotional strains such as anxiety, anger, fear, or excitement.

New cards
52
New cards

ANCHORING

refers to attaching a spending level to a certain reference.

New cards
53
New cards

SELF-ATTRIBUTION

refers to a tendency to make choices based on overconfidence in one's own knowledge or skill.

New cards
54
New cards

CONFIRMATION BIAS

when investors have a bias toward accepting information that confirms their already-held belief in an investment. If information surfaces, investors accept it readily to confirm that they're correct about their investment decision— even if the information is flawed.

New cards
55
New cards

EXPERIENTIAL BIAS

when investors' memory of recent events makes them biased or leads them to believe that the event is far more likely to occur again.

New cards
56
New cards

LOSS AVERSION

when investors place a greater weighting on the concern for losses than the pleasure from market gains.

New cards
57
New cards

FAMILIARITY BIAS

when investors tend to invest in what they know, such as domestic companies or locally owned investments.

New cards
58
New cards

LEVERAGE

Use (something) to maximum advantage. also use of another person's or firm's funds in return for agreeing to pay a fixed return for the funds.

New cards
59
New cards

OPERATING LEVERAGE

Use of fixed factors of production (fixed costs) instead of variable factors of production (variable costs) to produce a level of output.

New cards
60
New cards

FIXED COST

remain the same irrespective of the sale numbers of the company. For example rent, fixed salaries of the employees, taxes.

New cards
61
New cards

VARIABLE COST

are directly proportional to sales and it increases when sales rise and vice versa.

New cards
62
New cards

FIXED ASSETS TURNOVER RATIO

One means to measure operating leverage is the ratio of sales to fixed assets, also referred to as fixed asset turnover.

New cards
63
New cards

BREAKEVEN ANALYSIS

A technique for studying the relationship among fixed costs, variable costs, sales volume, and profits.

New cards
64
New cards

DEGREE OF OPERATING LEVERAGE

is a multiple that measures how much the operating income of a company will change in response to a change in sales.

New cards
65
New cards

BUSINESS RISK

The inherent uncertainty in the physical operations of the firm. Its impact is shown in the variability of the firm's operating income (EBIT).

New cards
66
New cards

DEGREE OF FINANCIAL LEVERAGE

is a leverage ratio that measures the sensitivity of a company's earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure.

New cards

Explore top notes

note Note
studied byStudied by 2 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 154 people
Updated ... ago
5.0 Stars(4)
note Note
studied byStudied by 9 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 14 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 31 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 56 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 6 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 922 people
Updated ... ago
4.9 Stars(8)

Explore top flashcards

flashcards Flashcard120 terms
studied byStudied by 15 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard123 terms
studied byStudied by 1 person
Updated ... ago
5.0 Stars(1)
flashcards Flashcard179 terms
studied byStudied by 6 people
Updated ... ago
5.0 Stars(2)
flashcards Flashcard769 terms
studied byStudied by 1 person
Updated ... ago
5.0 Stars(1)
flashcards Flashcard30 terms
studied byStudied by 7 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard70 terms
studied byStudied by 5 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard89 terms
studied byStudied by 142 people
Updated ... ago
5.0 Stars(2)
flashcards Flashcard545 terms
studied byStudied by 14942 people
Updated ... ago
4.2 Stars(399)