Apple
The global derivatives market is smaller than the world GDP.
True or False?
False!
The global derivatives market is larger than world GDP many times over.
What are the 3 functions of Money?
Store of Value ; Unit of Account ; Medium of Exchange
What is a CBDC?
A digital form of a country’s currency issued and regulated by the central bank; e.g., Britcoin is a proposed UK CBDC.
What is 'bank rate'?
The bank rate is the interest rate set by the BoE for lending to commercial banks
Only they get to keep Central Bank Reserves
Commercial Banks
According to Fractional Reserve Banking, higher the 'reserve ratio', lower the....?
Almost 97% of the UK Money Supply is comprised of...?
Commercial Bank Money
Bonds are generally considered safer than stocks, but returns are usually lower.
True or False?
True!
Face Value of Bond: $1000 ; Bought @900 ; Coupon: 5% paid annually ; 10 years till maturity
How can you calculate bond yield?
Profit made on bond/face value X 100/years till maturity
(100 + 500)/1000 X 100/10
6%
Higher bank rates make existing bonds (with lower coupons) less attractive, pushing their prices up.
True or False?
False!
Their prices go down.
Why don't banks keep giving out loans and creating infinite amounts of money? Give 2 reasons.
Profitability & credit risk: banks lend where expected returns outweigh risks.
Prudential regulation: capital and liquidity requirements.
Settlement needs: interbank payments require central bank reserves.
Recession expectations have been observed to ____ a normal bond yield curve.
Invert
True or False?
False!
Securities can be equity based or debt based.
There are more corporations in the UK than Sole Proprietorships.
True or False?
False!
There are more Sole Proprietorships in the UK than registered corporations.
According to the Efficient Market Hypothesis, is it better to invest in a mutual fund that has performed well for the past 5 years in a row or one that has performed poorly for five years in a row?
Can not be determined with the given information.
What are the 4 steps or stages of short shelling?
Borrowing the Stock, Selling the Stock, Buying Back the Stock, Returning the Stock
What is a 'lock-up' period post IPO?
Founders, early investors, and employees with share options usually face a lock-up period (90–180 days) where they cannot sell shares
_____ are a type of derivate which give you the right, but not the obligation, to buy or sell an asset at a specific price before a certain date
Options
USD has depreciated in comparison to the Pound.
What will happen to the quantity supplied of the Pound?
It will increase.
Explain how momentum investing is different from value investing.
Value investing is about buying stocks that look undervalued compared to their fundamentals, expecting the market to correct.
Momentum investing is about buying stocks that are already rising (or selling those falling), betting that trends will continue in the short term.