Podcast
Questions and Answers
What does the parable illustrate about stewardship?
What does the parable illustrate about stewardship?
What is the primary reason the US dollar is considered attractive as a central currency?
What is the primary reason the US dollar is considered attractive as a central currency?
Which of the following assets is NOT typically held in a central bank's foreign exchange reserves?
Which of the following assets is NOT typically held in a central bank's foreign exchange reserves?
What role do Special Drawing Rights (SDRs) serve for central banks?
What role do Special Drawing Rights (SDRs) serve for central banks?
Signup and view all the answers
What factor can influence the exact composition of a central bank's foreign exchange reserves?
What factor can influence the exact composition of a central bank's foreign exchange reserves?
Signup and view all the answers
What is a primary reason the US dollar is considered a stable currency?
What is a primary reason the US dollar is considered a stable currency?
Signup and view all the answers
Which currency is most widely held in a central bank's foreign exchange reserves?
Which currency is most widely held in a central bank's foreign exchange reserves?
Signup and view all the answers
Why is the US dollar preferred for international transactions?
Why is the US dollar preferred for international transactions?
Signup and view all the answers
What is a major characteristic of gold as an asset in foreign exchange reserves?
What is a major characteristic of gold as an asset in foreign exchange reserves?
Signup and view all the answers
Which factor significantly contributes to the US dollar's dominance as a reserve currency?
Which factor significantly contributes to the US dollar's dominance as a reserve currency?
Signup and view all the answers
Which type of bonds are central banks likely to hold in their foreign exchange reserves?
Which type of bonds are central banks likely to hold in their foreign exchange reserves?
Signup and view all the answers
What aspect of the US financial market increases its attractiveness to international investors?
What aspect of the US financial market increases its attractiveness to international investors?
Signup and view all the answers
What aspect contributes to the military power of the United States?
What aspect contributes to the military power of the United States?
Signup and view all the answers
What is one reason many countries hold US dollars as a reserve currency?
What is one reason many countries hold US dollars as a reserve currency?
Signup and view all the answers
How does the size of the US economy influence the US dollar's role in the global economy?
How does the size of the US economy influence the US dollar's role in the global economy?
Signup and view all the answers
Which market plays a key role in enhancing the importance of the US dollar?
Which market plays a key role in enhancing the importance of the US dollar?
Signup and view all the answers
Which of the following is NOT a reason for the widespread use of the US dollar?
Which of the following is NOT a reason for the widespread use of the US dollar?
Signup and view all the answers
What is the primary act governing investment business conduct in the UK?
What is the primary act governing investment business conduct in the UK?
Signup and view all the answers
Which authority is responsible for enforcing financial regulations in the UK?
Which authority is responsible for enforcing financial regulations in the UK?
Signup and view all the answers
Which country has the highest dollar currency reserves?
Which country has the highest dollar currency reserves?
Signup and view all the answers
Which institution governs both investment and securities activities in Malaysia?
Which institution governs both investment and securities activities in Malaysia?
Signup and view all the answers
Which currency has the highest value based on the list provided?
Which currency has the highest value based on the list provided?
Signup and view all the answers
What does the Bursa SE primarily govern in Malaysia?
What does the Bursa SE primarily govern in Malaysia?
Signup and view all the answers
Which country ranks first in highest government debt?
Which country ranks first in highest government debt?
Signup and view all the answers
Which country has the second highest interest rates?
Which country has the second highest interest rates?
Signup and view all the answers
Which of the following is not a participant in the financial ecosystem?
Which of the following is not a participant in the financial ecosystem?
Signup and view all the answers
Which country is not listed among the top 10 economies by GDP?
Which country is not listed among the top 10 economies by GDP?
Signup and view all the answers
Which of the following countries ranks the lowest in currency reserves?
Which of the following countries ranks the lowest in currency reserves?
Signup and view all the answers
Which of these agencies assesses creditworthiness?
Which of these agencies assesses creditworthiness?
Signup and view all the answers
What is the latest available value of government debt for Greece?
What is the latest available value of government debt for Greece?
Signup and view all the answers
Which of the following best describes the primary role of agents in a financial ecosystem?
Which of the following best describes the primary role of agents in a financial ecosystem?
Signup and view all the answers
What is a significant way agents manage and transfer risk in a financial ecosystem?
What is a significant way agents manage and transfer risk in a financial ecosystem?
Signup and view all the answers
How do individuals typically access capital according to the financial ecosystem?
How do individuals typically access capital according to the financial ecosystem?
Signup and view all the answers
Which characteristic of financial products is associated with the ability to buy and sell quickly?
Which characteristic of financial products is associated with the ability to buy and sell quickly?
Signup and view all the answers
What defines the term of maturity in the context of financial products?
What defines the term of maturity in the context of financial products?
Signup and view all the answers
Which financial instrument generally has a lower risk profile?
Which financial instrument generally has a lower risk profile?
Signup and view all the answers
What aspect of financial products relates to their capacity to be divided into smaller parts?
What aspect of financial products relates to their capacity to be divided into smaller parts?
Signup and view all the answers
Which of the following is NOT considered a category of financial instruments?
Which of the following is NOT considered a category of financial instruments?
Signup and view all the answers
Study Notes
Financial Markets
- Financial products (e.g., shares, bonds, forex) generate more money.
- Financial markets involve buyers and sellers exchanging goods and services.
Cone of Experience
- People generally remember 10%-30% of what they read or hear.
- 30% remember when they view images or watch videos.
- 50% remember when they watch a demonstration.
- 70% remember when they participate in a workshop.
- 90% remember when they simulate or do a real experience.
Class Expectations
- Breaks every 1:15 minutes
- Keep mobile phones on silent mode
- Ask questions with permission
- Attendance taken at the end of session
- Don't interrupt others
Session Learning Outcomes
- Understand contemporary operations of financial markets and intermediation.
- Identify and explain characteristics of financial instruments and value them.
- Understand the role of financial institutions and central banks in regulating financial markets and maintaining integrity.
Session 1 & 2 Finance Function: Learning Outcomes
- Financial Economic System: Need for Intermediation
- Finance Markets Holistic Approach
- Module Guide and Assessment
- Activity
- Seminar: c# coding
Emergence of Money: History of Money
- Non-monetary exchange (Barter): 9000-6000 BCE.
- Every object had two uses: original purpose and as an item to sell or barter.
- Standardized coinage: 1000 BCE-400 CE. Lasted more than five centuries.
- Medieval coins and moneys of account: 400-1450. Also lasted over five centuries.
- Banknotes: 15th-19th century. Centralized after 1694.
- Bronze Age (Commodity money): 3000 BCE.
Economic System
- First recorded customer complaint (complaint tablet to Ea-nasir): 1750 BCE.
Parable of the Bags of Gold: Matthew 25:14-30 (AD 80-90)
- (Stewardship): The role of the servant is related to trust and responsibility.
Financial Concepts
- Interest (scenario: How money is taken and earned by the banks)
- Investment (indirect and direct financing)
- To lenders: (Lenders give money to others for a return. Example: SSU -> Financial institution -> DSU)
- Banks and Financial Institutions
- Savings
- Dividend
- Earnings
- Time Value of Money
- Shares
Gold Reserves
- Top gold reserves by country (U.S.A., Germany, Italy, France, Russia, etc.) in tonnes.
What is the central currency of the World? and Why?
- US Dollar
Why Dollar?
- Economic dominance (largest economy in the world).
- Widespread use (accepted globally in international trade).
- Global stability (stable currency with low inflation).
- Financial market size (large and developed markets like the New York Stock Exchange).
- Military power (significant global influence).
What does the reserve hold?
- Foreign Exchange Reserves are a mix of different currencies (primarily USD) and assets held.
- Gold, Sovereign bonds (from stable countries), and Special Drawing Rights (SDRs)
Highest Currencies in the World
- List of currencies and their values.
Highest Dollar Currency Reserves
- Top countries with highest dollar currency reserves (by country and rank).
Highest Interest Rates Countries
- Countries with highest interest rates (by country and rank).
Biggest economies in 2021 by GDP
- Top 10 countries ranked by GDP.
Highest Government Debt
- Top 10 countries ranked by government debt.
Financial ecosystem participants
- Financial ecosystems consist of various players that interact to create an interconnected network. Examples: Commercial bank, Central bank, Payment service providers, Insurance, investment banks, Asset Managers; Stock exchanges; Regulators
There are more participants
- Hedge funds
- Credit rating agencies
- Financial advisors
- FinTech companies
- Microfinance institutions
- Sovereign wealth funds
Financial Eco-System
- Intermediaries (examples: savers, lenders and investors)
- (indirect financing – SSU transfer money via intermediary to DSU)
- (direct financing – SSU directly offer shares to raise capital from DSU)
Why do they interact?
- Exchange goods and services
- Manage risk
- Access capital
- Transfer and store value.
Some characteristics of Financial Products
- Risk: (Share, OSC is high; PSC is lower; Security bonds are lower, Bonds without security are higher)
- Liquidity: ability fast to buy and sell
- Expected Return
- Term of Maturity
- Currency Denomination
- Divisibility
Some characteristics of Financial products
- Type of instrument: Equities (stocks), bonds, derivatives (options and futures), currencies, commodities.
- Issuer: Corporations, governments.
- Nature of claims: Debt (obligations) and equity (ownership).
- Risk and return: Varying levels (low risk - bonds; high risk - equities).
- Marketability: Liquid (easy to buy/sell) vs. illiquid.
- Regulation: Varying levels.
- Complexity: Varying levels.
- Purpose: Raising capital, managing risk, speculating.
Regulation of Stock Exchanges
- UK Securities and Exchange Commission (SEC)
- Listed Securities
- Listing Authority
- Malaysian Security Commission (SC)
- Bursa Malaysia (Bursa SE)
Financial Markets: Learning Outcomes
- Understanding the financial ecosystem (including key terminologies)
- Role of securities exchanges in the financial economic system.
- Investment Analysis
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz covers the fundamentals of financial markets including key financial products like shares and bonds, alongside the Cone of Experience related to memory retention in learning. Participants will explore group expectations and outcomes for sessions to enhance understanding of financial operations and regulations.
