Podcast
Questions and Answers
What is the main difference between proprietary trading and trading for third parties?
What is the main difference between proprietary trading and trading for third parties?
- Proprietary trading is client-oriented, while trading for third parties is self-focused.
- In proprietary trading, the bank trades for itself, while in trading for third parties, it trades on behalf of clients. (correct)
- Proprietary trading involves long-term investments, while trading for third parties focuses on short-term gains.
- In proprietary trading, the bank acts as an intermediary, while in trading for third parties, it trades directly with the market.
What do sales designate in the context of banking?
What do sales designate in the context of banking?
- Sales refer to the bank selling its investment portfolio.
- Sales designate advisory services offered by banks.
- Sales designate activities like private banking and asset management.
- Sales refer to trades conducted on behalf of clients by the bank. (correct)
What does the 'buy side' represent in banking terminology?
What does the 'buy side' represent in banking terminology?
- The clients availing private banking services.
- The clients, corporations, and asset managers who buy products. (correct)
- The bank selling products to end-users.
- The bank engaging in proprietary trading.
Why might banks share inside information on corporate clients?
Why might banks share inside information on corporate clients?
What kind of risks are primarily associated with activities like private banking and asset management?
What kind of risks are primarily associated with activities like private banking and asset management?
What do advisory services offered by banks typically involve?
What do advisory services offered by banks typically involve?
What is the repricing gap in the repricing model?
What is the repricing gap in the repricing model?
How is refinancing risk defined in the context of interest rate risk?
How is refinancing risk defined in the context of interest rate risk?
In the context of the repricing model, what does a negative gap (RSA < RSL) indicate?
In the context of the repricing model, what does a negative gap (RSA < RSL) indicate?
What is meant by a rate-sensitive asset or liability according to the text?
What is meant by a rate-sensitive asset or liability according to the text?
What financial metric represents the value of an FI to its owners?
What financial metric represents the value of an FI to its owners?
If an FI has a positive gap (RSA > RSL), what type of risk is it exposed to?
If an FI has a positive gap (RSA > RSL), what type of risk is it exposed to?
