Money and
The Payments System
The Payments System
This term describes any item or commodity that is generally accepted as a means of payment for goods and services or for repayment of debt.
A) Currency
B) Money
C) Collateral
D) Credit
B) Money
Any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
A) Insurance policy
B) Operating lease
C) Financial instrument
D) Commodity contract
C) Financial instrument
Claims on a borrower's future income or assets sold directly to a lender.
A) Liabilities
B) Restrictive accounts
C) Securities
D) Retained earnings
C) Securities
The central monetary authority and chief regulatory body overseeing the Philippine financial system.
A) Department of Finance (DOF)
B) Securities and Exchange Commission (SEC)
C) Bangko Sentral ng Pilipinas (BSP)
D) Philippine Deposit Insurance Corporation (PDIC)
C) Bangko Sentral ng Pilipinas (BSP)
In business and economic terms, this concept is broadly defined as the direct cost of using money over time.
A) Yield
B) Discount
C) Interest
D) Principal multiplier
C) Interest
The British currency system was historically tied to a defined equivalent amount of this precious metal starting in 1844.
A) Silver Standard
B) Bimetallism
C) Platinum Standard
D) Gold Standard
D) Gold Standard
Checks payable to an enterprise or bearer that have not yet been presented to the bank for payment.
A) Outstanding checks
B) Postdated checks
C) Certified checks
D) Undeposited checks
D) Undeposited checks
The government agency that requires publicly traded firms to report standard financial statements to reduce adverse selection.
A) Federal Reserve System
B) Securities and Exchange Commission (SEC)
C) Internal Revenue Service
D) Chamber of Commerce
B) Securities and Exchange Commission (SEC)
A domestic bank confined to standard functions like accepting demand deposits, issuing letters of credit, and buying/selling foreign exchange.
A) Universal Bank
B) Investment Bank
C) Commercial Bank
D) Rural Bank
C) Commercial Bank
The basic debt instrument where a lender provides a principal amount that must be repaid at maturity along with an interest payment.
A) Coupon bond
B) Simple loan
C) Fixed-payment loan
D) Discount bond
B) Simple Loan
This transaction system includes direct deposits of payroll checks and electronic payments on car loans or mortgages.
A) Automated Clearing House (ACH)
B) SWIFT network
C) Fedwire
D) Real-Time Gross Settlement (RTGS)
A) Automated Clearing House (ACH)
Financial instruments that "derive" their value from contractually required cash flows or price changes of an underlying security, asset, or index.
A) Primary securities
B) Derivative financial instruments
C) Money market notes
D) Hybrid equities
B) Derivative Financial Instruments
The fundamental service provided by the financial system that allows savers to spread their wealth across many assets to reduce overall risk.
A) Risk sharing
B) Information gathering
C) Arbitrage settlement
D) Liquidity pooling
A) Risk sharing
Companies that extend credit facilities to consumers or businesses by factoring commercial papers, buying installment contracts, or leasing heavy equipment.
A) Financing Companies
B) Securities Dealers
C) Investment Houses
D) Credit Unions
A) Financing Companies
This curve shifts to the right when the central bank decides to increase the quantity of money in the economy.
A) Money demand curve
B) Loanable funds demand curve
C) Money supply curve
D) Investment schedule curve
C) Money Supply Curve
This online network and distributed ledger registers ownership of funds or assets securely on encrypted sites without relying on traditional bank intermediaries.
A) The Internet Archive
B) Blockchain
C) Central Database System
D) Clearstream
B) Blockchain
An agreement between a seller and a buyer requiring the delivery of a particular commodity or security at a designated future date and a predetermined price, actively traded on regulated exchanges.
A) Forward contract
B) Futures contract
C) Call option
D) Spot contract
B) Futures Contract
The expenses that savers incur to determine the creditworthiness of borrowers and to monitor how they use funds.
A) Transaction costs
B) Monitoring fees
C) Information costs
D) Agency adjustments
C) Information costs
These money market mutual funds are frequently utilized by savers as interest-bearing checking accounts.
A) Capital growth funds
B) Money market funds
C) Balanced mutual funds
D) Index tracking funds
B) Money Market Funds
The interest rate measured in standard currency terms that does not account for the eroding effects of inflation.
A) Real interest rate
B) Nominal interest rate
C) Effective yield
D) Compounded rate
B) Nominal Interest Rate
These written promises to pay on demand money deposited with a financial institution grew rapidly in use during the early 20th century.
A) Bonds
B) Promissory notes
C) Checks
D) Credit cards
C) Checks
A Japanese firm issues USD-denominated bonds in London. A German firm issues USD-denominated bonds in New York. How are these two bonds classified, respectively?
[ ] A) Yankee Bond; Eurobond
[ ] B) Eurobond; Yankee Bond
[ ] C) Samurai Bond; Foreign Bond
[ ] D) Eurobond; Eurobond
B) Eurobond; Yankee Bond
The reduction in average cost that results from increasing the volume of a financial service or good produced.
A) Economies of scope
B) Production maximization
C) Economies of scale
D) Capital compounding
C) Economies of scale
In the historical evolution of Philippine banking laws, the enactment of Republic Act No. 10641 fundamentally reshaped the competitive landscape by allowing this explicit structural tran
A) Full entry and liberalization of foreign banks
B) The total dissolution of rural banking networks
C) The mandatory nationalization of thrift banks
D) Placing the BSP under the Department of Finance
A) Full entry and liberalization of foreign banks
When evaluating a multi-period financial asset, this specific calculation represents the interest rate that equates the present value of all future expected cash inflows directly to the asset's current market purchase price.
A) Internal Rate of Return (IRR) / Yield to Maturity (YTM)
B) Simple Nominal Interest Rate
C) Realized Holding Period Return
D) Prime Discount Rate
A) Internal Rate of Return (IRR) / Yield to Maturity (YTM)