30 Questions
In which market are preowned securities traded?
Secondary market
What type of market involves negotiations directly between two or more parties?
Private market
Which type of financial institution helps companies raise capital by designing attractive securities for investors?
Investment banks
What does a corporation not receive in a secondary market transaction?
Funds
Where are standardized contracts like common stock and corporate bonds traded?
Public markets
What is the main role of financial institutions in the economy?
Channeling savings into loans or investments
Which type of financial institution is known for administering pension funds primarily?
Life insurance companies
Which type of financial institution is described as a cooperative association with members sharing a common bond?
Credit unions
Where do commercial banks get securities that they resell to savers?
From the corporation
Which financial institutions combine various financial entities under one corporate umbrella?
Financial services corporations
Where do life insurance companies invest the funds they collect from clients' annual premiums?
Stocks, bonds, real estate, and mortgages
Which institutions are known for accepting money from individual or corporate savers and investing in various financial instruments?
Mutual funds
What is the primary financial goal of a firm?
Maximize shareholders' wealth
In the capital allocation process, what happens in direct transfers?
Business sells securities directly to savers
What is the role of an underwriter in the capital allocation process?
Facilitating the issuance of securities
How do indirect transfers happen in the capital flow process?
Investment bank sells securities to savers
Which type of firms mainly use direct transfers in the capital allocation process?
Small firms
What risks does an investment bank face in indirect transfers?
Risk of not being able to resell securities to savers
What is the primary objective of the Bangko Sentral?
Promote and maintain monetary stability
Who appoints the members of the Monetary Board of the Bangko Sentral?
President of the Philippines
What is the term length for members of the Monetary Board?
Six years
How many members of the Monetary Board come from the private sector?
Five
Which law recognized the vital role of banks in providing an environment conducive to national economic development?
The General Banking Law of 2000
Who is designated as a member of the Cabinet on the Monetary Board?
Secretary of Finance
What entity can be authorized to engage in quasi-banking functions?
Universal and commercial banks
How does the Monetary Board determine if a person or entity is performing banking functions without authority?
By examining the organization of the bank
What is a key requirement for an entity to be authorized to operate as a bank or quasi-bank?
Obtaining funds from the public
What authority does the Bangko Sentral have during the examination of a bank?
Authority to examine related enterprises
Which classification of banks is mentioned in 'The General Banking Law of 2000'?
Universal and commercial banks
What must be satisfied for the Monetary Board to authorize the organization of a bank or quasi-bank?
Meeting specific regulatory criteria
Learn about various financial institutions like commercial banks, financial services corporations, and securities brokers. Understand their roles in buying and reselling securities to savers and borrowers.
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