Podcast
Questions and Answers
Which type of bank provides services like savings and mortgage banking?
Which type of bank provides services like savings and mortgage banking?
- Land Bank of the Philippines
- Thrift Banks (correct)
- Rural Banks
- Private Development Banks
Which type of institution is classified under non-bank financial institutions that involves Pawnshops?
Which type of institution is classified under non-bank financial institutions that involves Pawnshops?
- Lending Investors (correct)
- Insurance Companies
- Securities Dealers/Brokers
- Fund Managers
Which financial institution is a government bank dedicated to providing loans for agricultural projects in the Philippines?
Which financial institution is a government bank dedicated to providing loans for agricultural projects in the Philippines?
- Savings and Loan Associations
- United Coconut Planters Bank (UCPB)
- Land Bank of the Philippines (correct)
- Al-Amanah Islamic Investment Bank
Which type of institution among the listed options is a depository financial institution?
Which type of institution among the listed options is a depository financial institution?
Which government institution is primarily responsible for providing insurance to government employees in the Philippines?
Which government institution is primarily responsible for providing insurance to government employees in the Philippines?
Which category of non-bank financial institutions focuses on buying and selling of securities in the financial markets?
Which category of non-bank financial institutions focuses on buying and selling of securities in the financial markets?
What is the yield to maturity of a 10-year, 8% bond purchased at P9,800 with a face value of P10,000?
What is the yield to maturity of a 10-year, 8% bond purchased at P9,800 with a face value of P10,000?
If the arithmetic average yield is approximately .83%, what is the geometric average yield?
If the arithmetic average yield is approximately .83%, what is the geometric average yield?
What is the internal rate of return (IRR) or yield to maturity of the bond if the exact YTM is computed using the present value at 8% and 9%?
What is the internal rate of return (IRR) or yield to maturity of the bond if the exact YTM is computed using the present value at 8% and 9%?
What does the 642 represent in the yield to maturity (YTM) calculation of the bond?
What does the 642 represent in the yield to maturity (YTM) calculation of the bond?
What does the rate of return represent?
What does the rate of return represent?
In the yield to maturity calculation, what should the present value using the rates 8% and 9% be equal to?
In the yield to maturity calculation, what should the present value using the rates 8% and 9% be equal to?
What does adding .31 to the 8% rate in the yield to maturity calculation signify?
What does adding .31 to the 8% rate in the yield to maturity calculation signify?
What is the terminal value of an investment?
What is the terminal value of an investment?
How is expected return defined?
How is expected return defined?
What does ROI stand for?
What does ROI stand for?
How is the rate of return calculated?
How is the rate of return calculated?
What is the yield on an investment in government securities representative of?
What is the yield on an investment in government securities representative of?
What does EV stand for in the formula provided?
What does EV stand for in the formula provided?
In the formula, what does I represent?
In the formula, what does I represent?
What is the purpose of the Average Rate of Return (AR) in the provided text?
What is the purpose of the Average Rate of Return (AR) in the provided text?
Which formula calculates the Average Rate of Return (AR) as an unweighted average?
Which formula calculates the Average Rate of Return (AR) as an unweighted average?
How is the return for the month of February calculated?
How is the return for the month of February calculated?
If the value of return for March exceeds the value of return for February, how would the return for February be described?
If the value of return for March exceeds the value of return for February, how would the return for February be described?
What does interest rate represent?
What does interest rate represent?
When must the output for Module 4 be submitted?
When must the output for Module 4 be submitted?
What is the relationship between demand for money, velocity of money, interest rates, and prices called?
What is the relationship between demand for money, velocity of money, interest rates, and prices called?
What is the main focus of Module 4?
What is the main focus of Module 4?
Which activity is scheduled to take 30 minutes?
Which activity is scheduled to take 30 minutes?
How is interest rate usually expressed?
How is interest rate usually expressed?
Flashcards are hidden until you start studying
Study Notes
Financial Institutions
- Ordinary Commercial Banks
- Universal Banks
- Thrift Banks
- Savings and Mortgage Banks
- Private Development Banks
- Savings and Loan Associations
- Rural Banks
Government Banking Institutions
- Land Bank of the Philippines
- Development Bank of the Philippines
- Al-Amanah Islamic Investment Bank of the Philippines
- United Coconut Planters Bank (UCPB)
- Overseas Filipino Bank, A Savings Bank of LandBank (OFBank)
- UCPB Savings Bank
Non-Bank Financial Institutions
Private Non-Bank Financial Institutions
- Investment Banks/Companies
- Finance Companies
- Securities Dealers/Brokers
- Pawnshops
- Lending Investors
- Fund Managers
- Trust Companies/Departments
- Insurance Companies
Government Non-Bank Financial Institutions
- Government Service Insurance System
- Social Security System
Capital Markets
Financial Intermediation
- Direct and indirect finance
- Depository and non-depository financial institutions
- Role of financial intermediaries
Calculating Yield to Maturity (YTM)
- Formula: F - P + C / n
- Approx. YTM = F + P / 2
- Example: 10-year, 8% bond of P10,000 purchased at P9,800
- YTM ≈ 8.28%
Geometric Average (GA) vs. Arithmetic Average (AA)
- GA: (1 + .0167)(1 + (-.0164))(1 + .0167)(1 + .0082) - 1 ≈ .008218 or .82%
- AA: slightly higher than GA
Internal Rate of Return (IRR)
- Formula: F - P + C / n
- Approx. YTM = F + P / 2
Return on Investment (ROI)
- Formula: EV + I - IV / IV
- Example: Stocks of Bright Corporation
- EV: Ending value of investment
- I: Income received from investment
- IV: Initial value of investment
Average Rate of Return
- Formula: AR = (∑ (RoR)n / n
- Example: Monthly returns
- AR: Average rate of return
- n: Number of intervals
- RoR: Holding period return/yield for each month or year
Determinants of Interest Rates
- Discussion of interest rates
- Theories of interest rate determination
- Determinants of interest rate
- How they affect interest rate
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
