Financial Markets and Learning Expectations

The responsible management of resources entrusted to someone, typically by a superior.

A portion of wealth entrusted to a servant by a master.

Another portion of wealth entrusted to a servant by the master.

The least amount of wealth entrusted; a smaller portion.

The point when the master comes back to check on what his servants did with the wealth.

The servants' duty to report on the returns they gained through investing their master's money.

A servant who manages the entrusted wealth responsibly, thus earning appreciation from the master.

A servant who mishandles the entrusted wealth by hiding it instead of investing.

The US dollar is a central currency for international transactions, frequently used worldwide.

The US dollar's consistency and low inflation make it reliable.

The US's large economy supports the dollar's significance.

Many countries hold US dollars as a safe investment.

The US's large and developed financial markets draw investment.

The US dollar is widely accepted in global trade.

Deals and exchanges involving multiple countries.

Countries holding dollars as reserves get a strong international currency.

A network of interconnected entities like individuals, businesses, and institutions that engage in financial activities.

Agents in a financial ecosystem interact to buy and sell assets like stocks, bonds, commodities, and currencies.

Agents in a financial ecosystem collaborate to manage and transfer financial risk, like insurance companies providing policies.

Agents in a financial ecosystem interact to obtain funds, like businesses issuing bonds or individuals taking out loans.

Agents in a financial ecosystem interact to transfer value and ensure its safekeeping, like depositing money in banks.

The ability to quickly buy or sell a financial product without significantly affecting its price.

The potential profit or income anticipated from a financial product.

The duration of a financial product, especially bonds, until its repayment or expiration.

Organized markets where securities like stocks and bonds are bought and sold.

Facilitate capital allocation, price discovery, and provide liquidity for financial assets.

The UK's independent regulatory body responsible for enforcing financial market rules.

Malaysian regulatory body overseeing the securities and capital markets.

The worth of a currency compared to other currencies. A higher value means a currency can buy more goods and services in another country.

The countries holding the largest amount of US dollar reserves. These reserves are used for international transactions and to stabilize currencies.

Countries with the highest interest rates on loans. These rates can encourage borrowing and spending, but also lead to inflation.

The total value of goods and services produced in a country during a specific time period. It's a measure of a country's economic output.

The amount of money a government owes to its lenders. High debt can put pressure on a country's finances.

Financial institutions that provide loans, accept deposits, and offer other financial services to individuals and businesses.

Government-backed institutions that manage a country's money supply, set interest rates, and ensure financial stability.

Financial institutions that specialize in helping companies raise capital, issue securities, and provide financial advice.

Professionals who manage investments for individuals and institutions, aiming to grow their assets over time.

The US Federal Reserve is the central bank of the United States, responsible for managing the country's monetary policy. It plays a crucial role in controlling inflation, setting interest rates, and ensuring the stability of the financial system. Its actions impact the overall economy, including the value of the US dollar.

The US dollar is a leading global currency, meaning many countries around the world use it for international transactions and trade. Due to its stability and the strength of the US economy, the dollar is widely accepted and trusted as a central currency.

Foreign exchange reserves are assets held by a country's central bank, primarily in the form of foreign currencies. These reserves are used to stabilize the country's exchange rate, manage external debt, and intervene in foreign exchange markets.

SDRs are an international reserve asset created by the International Monetary Fund (IMF). They are used to supplement a country's foreign exchange reserves and can be exchanged for other currencies. They are particularly important for countries that experience financial difficulties.

Gold is seen as a safe haven asset, meaning it tends to hold its value even during economic turmoil. It's a traditional store of value and many central banks still hold it as a component of their foreign exchange reserves.

Sovereign bonds are government bonds issued by a stable country. These bonds offer relatively safe returns and can be held by central banks as part of their foreign exchange reserves. They are particularly valuable during times of economic stability.

The composition of a central bank's reserves depends on a variety of factors, including the country's monetary policy goals, its economic situation, and its political stability. Each country strategically manages its reserves based on its own unique circumstances.

The United States possesses a strong military, which contributes to its global influence and the perceived stability of the US dollar. Because of this stability, the US dollar is more attractive to other countries as a central currency. This is a significant factor in the US dollar's prominence in global financial markets.