FM 300 EXAMS COMPILATION

INVESTMENT BANKING

A category of financial organization that conducts highly sophisticated financial transactions such as corporate mergers and acquisitions, stock issuance, acting as a corporate consultant, and doing financial analysis.

INSURANCE COMPANIES

It's a monthly or annual payment into a system that functions as a safety net, covering the cost of major, often unanticipated expenses.

TRUE

(TRUE/FALSE) Central banks enforce reserve requirements that limit how much money banks may lend to clients or how much equity they must have on hand.

BANGKO SENTRAL NG PILIPINAS

It is the central bank of the Republic of the Philippines.

160

There are how many Central Banks all over the world?

LA UNION, CEBU CITY, DAVAO CITY

Name the three headquarters of the Central bank in the Philippines

COMMERCIAL BANKS

These are a bank that focuses on business needs

19

The Central bank of the Philippines consists of how many branches nationwide?

ONLINE BANKS OR FINTECH STARTUPS

These are digital banking organizations that provide attractive savings rates and, in most cases, free checking accounts.

AMANDO M. TETANGCO JR.

He is the Governor of the Central bank of the Philippines

DEPOSITORY FINANCIAL INSTITUTION

It supports business security and stability, lends money placed for safeguarding to others, trades in other assets, and provides a funds transfer service.

RETAIL BANKS

A sort of financial organization that focuses on personal finance and caters to people including you and me.

VENTURE CAPITAL AND PRIVATE EQUITY

These firms make an investment in corporate entities in compensation for a share of the revenue or a portion of the profits.

ACCOUNTING SERVICES

The majority of the world's largest publicly traded corporations use these institutions for auditing and accounting operations.

FALSE

(TRUE/FALSE) Becoming an investment banker is not a difficult or competitive undertaking that takes a significant amount of time and effort.

FINANCIAL INSTITUTIONS

A government or private owned corporation that collects resources from the wider populace and other entities then spends them in capital assets such as mortgages, stocks, deposit accounts, and revenue real estate.

The BSP Governor serves as its chairman, and it is made up of 5 full-time private-sector members and 1 Cabinet member.

The BSP's authority and responsibilities, such as monetary policy and financial system monitoring, are overseen by the MONETARY BOARD.

JUNE 15, 1948

Republic Law No. 265 (Central Bank Act) was promulgated by President Elpidio Quirino in what specific date?

CENTRAL BANK

Articulates and executes monetary system with the objective of adjusting the currency supply to reduce inflation.

WEALTH MANAGEMENT

These financial institutions assist consumers in saving money effectively and get a return on their investment.

CHECKS

A written, dated, and signed document that instructs a bank to pay the bearer a certain amount of money. The payor or drawer is the person or entity who writes the instrument, whereas the payee is the person to whom it is written. On the other side, the drawee is the bank on which the check is drawn.

BROAD MONEY

It's a metric for determining the quantity of money in circulation in a given economy. It is characterized as the most comprehensive approach of assessing a country's money supply, taking into account narrow money as well as other assets that may be quickly changed into cash to purchase goods and services.

TRUE

(TRUE/FALSE) Even though money is the most liquid of all assets, its value drops in value as a result of inflation.

*BROAD MONEY LIABILITIES ( M3)

Large time deposits, institutional money market funds, short-term repurchase agreements (repos), and bigger liquid assets are all included in this estimate of the money supply. The measurement comprises "near money" assets, which are less liquid than other components of the money supply and are more directly tied to the finances of major financial institutions and companies than those of small firms and people.

MORAL SUASION

It is the process of influencing a person or group to perform in a certain manner by verbal appeals, persuasion, or implicit and explicit threats, rather than through open coercion or physical force. It's sometimes used in economics to refer to central banks.

MONETARY AGGREGATES

It is a formalized method of calculating the value of money, such as cash or money market instruments. These are used to determine the amount of money in a nation's economy.

COMMODITY MONEY

Its worth is determined by the item from which it is manufactured. It has inherent worth because of the precious metal it is constructed of or guaranteed by, but devaluation or rises in precious metal availability can induce inflation.

CREDIT LIMIT

The highest amount of credit that a financial institution or other lender will provide to a debtor for a certain line of credit.

OPEN MARKET OPERATIONS

It is when a central bank buys or sells short-term Treasuries and other assets on the open market to impact the money supply. Purchasing securities brings money to the economy, making loans more accessible and lowering interest rates. Selling assets off the central bank's balance sheet takes money from the economy, raising interest rates and making loans more expensive.

TRUE

(TRUE/FALSE) Monetary aggregates are a formal means of calculating a country's total amount of money.

MONETARY BASE

It is the total quantity of money generated by a country's central bank. This comprises the entire amount of cash in circulation, as well as the currency physically stored in commercial bank vaults and the commercial banks' reserves maintained at the central bank.

INTEREST RATES

These are the associated fees with money borrowed. They are the charges that creditors receive in exchange for lending you money. These rates fluctuate often and are determined by the lender as well as your creditworthiness.

NARROW MONEY (M1)

The entire amount of money in circulation is known as the money supply. It includes currency in the public's hands, including notes and coins, as well as peso demand deposits, non-bank issuers' tourists' checks, and other checkable deposits. In a nutshell, they are monies that are ready to be used.

FRACTIONAL RESERVE BANKING

A banking system that operates in practically every nation in the globe, in which banks that accept public deposits are mandated to maintain a part of their deposit liabilities in liquid assets as a reserve, and are free to lend the rest to borrowers.

E-MONEY

It is broadly described as an electronic monetary worth storage on a technological device that may be extensively utilized to make payments to parties. The gadget functions as a prepaid bearer instrument that does not require the use of a bank account to complete transactions.

MONEY

It is a type of economic unit that serves as a widely accepted medium of exchange for transactional purposes in a given economy. It also offers a service for lowering transaction costs, namely the twofold coincidence of desires. It begins as a commodity with a physical attribute to be used as a means of exchange by market actors.

RESERVE REQUIREMENTS

These are the money held in reserve by a bank to guarantee that it can satisfy its liabilities in the event of an unexpected withdrawal. These are also a technique used by the central bank to affect interest rates by increasing or decreasing the liquidity in the economy.

FIAT MONEY

It's a type of money that has been recognized legal tender. Currency in circulation, such as paper currency or coins, is included. Instead of an actual product or financial instrument, it is protected by the government of a country. The US dollar, the British pound, the Indian rupee, and the euro are all examples of this.

PRUDENTIAL GUIDELINES

It is a form of financial regulation that imposes capital requirements, liquidity needs, concentration risk (or big exposures) restrictions, and related reporting and public disclosure requirements, as well as supervisory controls and processes, on financial firms.

FALSE

(TRUE/FALSE) In order to achieve the goals of economic stability (low inflation), high employment, and aggregate income growth, the Central Bank's money supply is not governed by monetary policy.

EXPANSIONARY MONETARY POLICY

It's a sort of macroeconomic monetary policy that tries to boost the pace of monetary expansion in order to boost a country's economic growth. The increased money supply is required to strengthen the economy.

INFLATION

It refers to an economy's overall gradual growth in the pricing of goods and services. When the overall price level rises, each unit of currency can buy fewer products and services, resulting in a decrease in money's buying power.

EXPANSION

It is a rise in economic growth and the number of products and services. It is a period of economic development as assessed by real GDP growth.

PEAK

It is the highest point in an economic cycle between the end of an economic boom and the start of a downturn. The cycle is the last month before several major economic indices, such as employment and new home starts, start to decline.

FALSE

(TRUE/FALSE) Monetary policy increases rates in the economy in order to spur growth and employment.

CONTRACTION

It refers to a decrease in national output as measured by Gross domestic product (GDP). There has been a decrease in real personal income, industrial production, and retail sales as a result of this. It raises the unemployment rate.

TRUE

(TRUE/FALSE) Household and business demand will be stimulated by the interest rate drop, which will lead to an increase in household and investment demand, which will lead to an increase in aggregate demand.

AGGREGATE DEMAND

It is the entire quantity of products and services in an economy that customers are willing to pay for over a certain period of time.

MONETARY EASING

A central bank's policy of lowering interest rates and deposit ratios in order to increase credit availability. This makes it easier for firms to borrow money, which encourages them to invest and expand their operations.

FALSE

(TRUE/FALSE) Expansionary policy increases imported inflation and demand-pull inflation.

TROUGH

This is a word used in economics to describe a point in the business cycle when activity or prices are bottoming down before a rise.

CONTRACTIONARY MONETARY POLICY

A tactic employed by a country's central bank to slow down the economy and manage increasing inflation during periods of rapid expansion.

ECONOMIC CYCLE / BUSINESS CYCLE

It is the condition of an economy as it fluctuates between periods of economic boom and decline. It's commonly quantified in terms of a country's or region's Gross Domestic Product (GDP). Other economic variables include unemployment, consumer spending, and interest rates.

FALSE

(TRUE/FALSE) Extensive investigation and a high level of uncertainty are necessary for deciding when to engage in expansionary policy, how much to do, and when to quit. Expansion that isn't excessive might lead to problems like high inflation or an overheated economy.

TRUE

(TRUE/FALSE) When central bank rates fall below those charged by commercial banks to their clients, commercial banks will use this low-cost source of capital to create credit and extend additional loans, hence expanding the money supply.