TCHE302_Topic 5_Financial Markets

Financial instruments used for short-term borrowing and lending, typically with maturities of one year or less.

It appears to be a reference date, possibly for a lecture or assignment.

Participants include individual investors, institutions, governments, and corporations.

A percentage interest in the firm, consistent with the percentage of outstanding stock held.

A written legal obligation of one party to transfer something of value, usually money, to another party at a future date under specified conditions.

Chapter 3.

Professionally managed funds.

It provides a market for trading equity-related derivative products.

The speed at which new information flows to the market and is absorbed.

Individuals, institutions, and governments.

To provide liquidity and funding for short-term needs.

They invest and save through various financial instruments.

It represents the core features of the financial system without complexity.

Current and future needs, length of fund usage, scale of funds needed, and risk of funded projects.

All information available in the market.

Owners (shareholders) do not affect the day-to-day affairs.

Futures contracts are similar to forward contracts but are standardized and traded on organized exchanges.

It is unclear without additional context.

A short-term debt instrument issued by large banks and well-known corporations.

Ownership claims are widespread and easily transferable.

Treasury bill or commercial paper.

Platforms where buyers and sellers trade financial assets.

Buyers and sellers meet in one central location to conduct trades.

Claims to share in the net income and assets of a business.

A type of preferred stock that does not accumulate unpaid dividends.

To facilitate the buying and selling of securities in the primary market.

A contract that obligates the holder to buy or sell a specified amount of a financial instrument for a predetermined price at a future date.

It influences the structure and types of financial markets available.

The principal form of equity issued by a corporation, which bestows a claim to residual cash flows and ownership and voting rights.

To enable the trading of previously issued securities.

They link buyers and sellers by buying and selling securities at stated prices.

HOSE and HNX use Viet Nam Securities Depository and Clearing Corporation (VSCD).

They are sold at a discount and do not make interest payments.

Ownership and voting rights, along with a claim to residual cash flows.

A single payment of cash.

August 19, 2024.

A bond that gives the issuer the right to redeem it before the final maturity date.

The initial listing of a corporation on the stock exchange.

Chapter 11.

A formal exchange facilitating the issue, buying, and selling of equity securities.

To facilitate trading in existing shares.

Deposit the required funds into its account to cover the draft.

The holder.

The issue of new shares to selected institutional investors.

Purchases the commercial paper as an investment.

Stamps it 'accepted' for a fee.

A short-term debt instrument used to finance the government.

Banks, insurance companies, mutual funds, and pension funds.

Stocks, bonds, currencies, and derivatives.

Stockholders are paid dividends from the net earnings of the corporation, usually every quarter.

They standardize certain features of the contract.

A type of preferred stock that can be converted into common stock.

A short-term debt instrument or time deposit.

Chapters 2 and 8.

The time from the issuing date to the instrument’s expiration date.

A type of preferred stock that accumulates unpaid dividends.

Issues the commercial paper to raise funds.

Places where financial instruments are bought and sold.

Limited to the issue price of shares.

Stockholders are the last in line to claim on the assets and income of the corporation.

Liabilities and equities on one side, and assets on the other.

Capital market instruments.

Exchange traded funds (ETFs), real estate investment trusts (REITs), and infrastructure funds.

Contracts that represent an asset to one party and a liability to another.

$1000.

Regulation and monitoring.

By borrowing or investing in federal funds based on whether they have deficit or excess reserves.

Debt involves borrowing funds to be repaid with interest, while equity represents ownership in a company.

A significant change in a company's financial status.

Exchanges have a central location for trading, while over-the-counter markets operate at different locations.

A financing arrangement where a supplier provides goods or services with payment due at a later date.

Equity claims on the net income and assets.

Australian Securities Exchange (ASX).

Preferred shareholders.

Federal Funds, Treasury bills, Negotiable bank certificates of deposit, Commercial paper.

A derivative instrument.

There are primary markets, secondary markets, money markets, and capital markets.

Intermediate and long-term instruments.

Informational efficiency.

An agreement where the borrower sells securities to the lender and commits to repurchase them at a specified date and price.

A bond that gives the holder the right to convert it into a pre-specified number of shares of common stock.

To provide services such as lending, investment, and risk management.

Stockholders own a part of the corporation, while bondholders are creditors with no ownership interest.

It determines the type of financial instruments and markets that are utilized.

A set amount known as the face value.

Provision of markets for a range of financial securities.

Savers of funds available for lending.

Short-term funds transferred between financial institutions, usually for one day.

A type of preferred stock that allows holders to participate in additional earnings.

An unconditional promise in writing to pay a specific amount to a beneficiary.

It is subject to the company's dividend policy.

An asset that the lender receives if the borrower does not pay back the loan.

The ratio of share turnover to market capitalization.

Higher yield due to sharing in the profit margin.

A type of preferred stock that can be redeemed by the issuer before its maturity.

Face value minus the purchase price.

Short-term instruments.

Contractual agreements by borrowers to pay holders fixed amounts at regular intervals until maturity.

To reallocate assets efficiently and support economic growth.

A money market instrument used for short-term financing.

Standardized agreements to buy or sell an asset at a certain time in the future for a certain price.

To acquire funds.

To facilitate the interaction between surplus units (savers) and deficit units (borrowers).

Usually Treasury bills (T-bills).

They regulate markets and may also borrow funds.

To facilitate the raising of capital, transfer of risk, and international trade.

To ensure market participants have confidence in the integrity of market operations.

They are bought and sold on the stock exchange like shares in corporations.

Normally less than two weeks.

Demand and supply.

A financial market where new issues of securities, like bonds or stocks, are sold to initial buyers.

Borrowers of funds for capital investment and consumption.

To meet minimum reserve requirements set by the Federal Reserve.

Longer-term debt securities.

Now and the future.

A written order for unconditional payment of a specified amount to a beneficiary.

A 2% discount if paid within 10 days, otherwise the full amount is due in 30 days.

March 10, 2032.

A place where securities are held.

Via computer from the broker's office, in order of time received and buy/sell price.

Another stock exchange in Vietnam.

It represents ownership in the corporation.

Securities issued to existing shareholders and investors, by prospectus.

The settlement of transactions conducted through the exchanges.

To facilitate the buying and selling of financial instruments and to allocate resources efficiently.

To facilitate the efficient and orderly sale of new financial securities.

The demand and supply for funds.

It provides a market for trading managed products.

Banks.

The issue of additional shares to existing shareholders on a pro-rata basis.

No maturity and no refund.

Common stock or long-term bond.

A company whose shares are quoted and traded on a formal stock exchange.

To meet various financial needs and to manage different types of risks.

Agents of investors who match buyers with sellers of securities.

Money markets deal with short-term debt instruments, while capital markets deal with longer-term instruments.

No, it does not have interest payments.

Securities trading system.

Zero-coupon bonds.

The interest rate applied to the face value of the bond.

Dealers at different locations buy and sell securities 'over the counter' to anyone willing to accept their prices.

A bond with a face value of $1,000 that makes annual coupon payments at a coupon rate of 10% for 10 years.

To facilitate trading in financial instruments derived from other assets.

Instruments with a maturity of less than 12 months.

Capital market instruments.

Place an order.

A bond with no underlying security attached.

Options, warrants, and futures contracts.

Agreements to buy or sell an asset today.

There are many willing buyers and sellers of the security at a given point in time.

The face value amount.

Within three days/two days.

An arrangement by two counterparties to exchange one stream of cash flows for another.

The issuer.

A bank draft issued by a firm, payable at a future date, and guaranteed by the bank.

By managing funds, providing loans, and facilitating transactions.

In the mid-16th century England.

On the Federal Reserve's H15 release page.

Periodic interest.

A bond where the issuer promises to make periodic interest payments and pay the face value at maturity.

Chapter 4.

The corporate bond market.

Periodic interest payments made to the bondholder for the life of the bond.

Limited to any partly paid portion of shares.

Open an account.

A short-term financing option that allows buyers to purchase goods and pay for them later.

It affects the willingness of investors to provide funds and the types of financial instruments used.

A change in a company’s financial forecasts.

A short position.

Ability to obtain large amounts of finance at a relatively cheap cost.

They allocate resources efficiently and provide liquidity.

The amount that the issuer must pay at maturity.

An announcement regarding the distribution of profits to shareholders.

On the over-the-counter market.

The conflict of interest between owners (principals) and managers (agents).

An attempt to acquire control of a company.

Daily.

Capital market.

To provide relevant market data and information to investors.

Sell shares in a corporation, which can cause the share price to fall.

28 days.

They are residual claimants on the corporation's income and assets.

Ownership interest in an asset.

Financial instruments whose value is derived from an underlying asset.

Costs of discount, increased total credit period, accounts receivable, and bad debt costs.

No, new funds are not raised by the issuing company.

Voting rights and preemptive rights.

On organized exchanges.

At maturity.

The reinvestment of dividends into the corporation for additional shares.

It increases the appeal of buying new shares in the primary market.

Yes, in a secondary market.

HOSE (Ho Chi Minh Stock Exchange) and HNX (Hanoi Stock Exchange).

Return, risk, liquidity, and timing of cash flows.

Non-standardized contracts negotiated between the writer and buyer.

Australian Securities and Investments Commission (ASIC).

A stock exchange in Vietnam.

Opportunity cost = (% discount / (100 - % discount)) × (365 / days difference between early and late settlement).

It facilitates investor diversification and encourages investment in corporate securities.

A bond with a face value of $1000 maturing in one year and purchased for$950.

0.160298 or 16.03% per annum.

Appointment of specialized management.

$1,000.

'n' represents the net amount due after the discount period.

They are backed by the government.

The market for the issuance of a security, where it is first made available for purchase.

Short-term assets should be funded with short-term liabilities.

10% per year.

The market where securities are bought from other investors after the initial issuance.

Dismiss management from the board.

They can generate gains if the value of the underlying assets declines.

Threat of takeover and loss of employment.

An up-front fee received by sellers of call options from the purchaser as compensation.

Ordinary shares, hybrid securities, preference shares, convertible notes.

The right to buy (call) or sell (put) a specific asset at a certain price during or at the end of a specified duration.

Secured debt is backed by collateral, while unsecured debt is not.

Long-term debt securities issued by corporations and government agencies.

A financial security that derives its price from an underlying commodity or financial instrument.

Stock exchange rules that a listed entity must comply with.

State Securities Commission (SSC).

A long position.

To repay the principal amount on a specified future date.

Standardized financial contracts traded on a formal exchange.

To supply capital for corporations.

The most shareholders can lose in the event of corporate failure is their original investment.

Dividends are fixed.

The period from the date of issuing to the expiration date.

Debt market, equity market, derivatives market, primary market, secondary market, money market, capital market.

Number of shares on issue multiplied by the current share price.

The separation of ownership and control.

Risk management (hedging) and speculative instruments.

Retail private debt (credit card, car loan, mortgage), company private debt, corporate bonds, government bonds, notes and bills, asset-backed obligations.

CHESS (Clearing House Electronic Sub-register System).

Financial contracts whose values are derived from the values of underlying assets.

Broker.

A fixed or floating charge over the issuer’s unpledged assets.

To ensure transparency and prevent conflicts of interest.

Check the order.

Term Loans, Unsecured Notes, Bonds, Project Finance.

They are sold at a discount from par value.

It provides information about price, yield, maturity, and credit rating of debt instruments.

A market participant with access to CHESS, such as a stockbroker.

Residual claim.

Options, swaps, forward, and future contracts.

A payment made to shareholders from a corporation's earnings.

Individuals, institutions, governments, and corporations.

Margin (currency).

To trade all listed securities and derivatives.

Public issue, family issue, and private placement.

It requests unconditional payment for a definite amount of money.

10 years.

Securities issued to the public at large, by prospectus.

Less than one year.

Corporate bonds and Treasury bonds.

To ensure efficient execution of trades and the settlement of transactions.

Instruments with a maturity of more than 12 months.

$999.81333.

Plain-vanilla bonds and floating rate bonds.

To facilitate the trading of securities.

The right to sell the underlying asset by a certain date for a certain price.

It can obtain large amounts of finance and has specialized management.

Increased sales.

An electronic trading system that allows buy and sell orders at minimum cost and time delay.

The nominal value assigned to a share of stock.

Equity holders have a residual claim on remaining assets.

The relative ease and speed with which an asset can be converted into money.

Overseeing and managing investment products for investors.

The set amount paid at maturity.

A financial market where previously issued securities can be resold.

After the expiration date.

The forces of supply and demand in a competitive market.

The increase in the value of the security from purchase to maturity.

The weighted average of rates on trades through New York brokers, reported by the press.

$100 every six months.

No, they do not make any payments during the term.

By running the business for their own benefit rather than maximizing shareholder value.

Speculation and risk management.

The listing, quotation, and trading of typically longer-term debt instruments on a stock exchange.

The price for immediate delivery of the asset.

On the stock exchange.

Every six months.

The result of the trade.

At any time up to the expiration date or maturity.

Share options.

The value of a company's assets minus its liabilities.

Financial markets where previously issued securities can be resold.

The degree to which they can be easily liquidated without a loss of value.

Common shareholders.

Regular interest payments (coupon).

$100 in coupon payments.

To provide a platform for trading interest rate-related securities.

Liquidity, which is the degree to which securities can easily be liquidated (sold).

The face value of the bond.

Limited liability.

Greater effectiveness in the planning and implementation of strategic decisions.

Securities issued to institutional investors, by information memorandum.

Limited liability.

At face value, but may also be issued at a discount or with deferred/zero interest.

A type of equity that provides dividends before common shares.

Calculated using the formula: (Face Value - Purchase Price) / Face Value * (365 / Days to Maturity).

To adjust the risk of existing investments in securities.

Only on the expiration date itself.

Financial markets where new issues of a security are sold to initial buyers.

Debt ranks ahead of equity.

Primary markets deal with new securities, while secondary markets deal with resale of existing securities.

Shares, listed company common and preferred shares.

Timing of repayment, risk, interest rate structures (variable or fixed), and source of funds.

$950.

Claims on income and assets.

The right to buy the underlying asset by a certain date for a certain price (strike price).

Straight corporate bonds, floating rate notes (FRNs), convertible notes, and preference shares.

The ownership of listed securities.

Detailed information about the business.

The price at which it is bought and sold in the market.

Forwards, Futures, Options, Swaps.

A market for the exchange of currency pairs.

Ownership is transferable, such as commercial bills and promissory notes.

A term loan obtained from a bank.

Coupon bonds and zero-coupon bonds.

The price is determined by the issuing firm.

The corporate form is unaffected by changes in management or ownership.

Its importance was highlighted by the Global Financial Crisis (GFC).

It consists of fixed income securities with a maturity of less than a year.

Calculated using the formula: (Face Value - Purchase Price) / Purchase Price * (365 / Days to Maturity).

Payments made to shareholders from earnings.

Investors who purchase new securities directly from issuers.

They enable investors to speculate on movements in the value of underlying assets without purchasing those assets.

To enforce rules and regulations to maintain market integrity.

A higher claim than unsecured note holders.

It consists of securities with a maturity equal to or greater than a year.

Quotation on a stock exchange provides access to a wider market.

Call options give the right to buy, while put options give the right to sell the underlying asset.

More rigorous corporate governance.

A contractual claim to periodic interest payments and repayment of principal.

Short term (money market) and medium to long term (capital market).