Professional Documents
Culture Documents
Questionnaire For Financial Markets
Questionnaire For Financial Markets
Sales
ACCTNG 3A
20181114
1. What is the significance of suitability rule embodied in the listing rules of the Philippine
Stock Exchange?
- The suitability rule embodied in the listing rules of the Philippine Stock Exchange is
significant in the sense that it covers the ground for the disqualification of listing
applications.
b. Bond Market
- The bond market can be used by businesses and governments to raise
financing for a project or investment. In a bond market, investors buy bonds
from a company, which then returns the bond amount plus interest to the
investors over a defined period of time.
c. Commodities Market
- Commodities markets are meeting places for producers and consumers
to trade physical commodities such as crops, animals, and soybeans, as well
as energy goods (oil, gas, and carbon credits), precious metals (gold, silver,
and platinum), and "soft" commodities such as gold, silver, and platinum
(such as cotton, coffee, and sugar). Spot commodities markets are those
where physical goods are traded for cash.
d. Derivatives Market
- A derivative is a contract between two or more parties whose value is
determined by the value of an underlying financial asset (such as a securities)
or a group of assets (like an index). Derivatives are secondary securities
whose value is solely determined by the primary security to which they are
tied. On its own, a derivative is useless. Rather than trading equities directly,
a derivatives market trades futures and options contracts, as well as other
advanced financial products, that derive their value from underlying
instruments like bonds, commodities, currencies, interest rates, market
indexes, and stocks. Futures markets are where futures contracts are listed
and sold. Unlike OTC forwards, futures markets are well-regulated, have
established contract parameters, and trades are settled and confirmed by
clearinghouses.
7. Distinguish open end investment company with close end investment company.
- Open-end investment companies (what most people think of when they think of
mutual funds) are distributes shares to investors directly, while a close-end
investment company issues a defined number of shares in a closed-end fund
through an initial public offering. Although open-end funds are potentially safer than
closed-end funds, closed-end funds may provide a superior return by combining
dividend payments and capital appreciation. A closed-end fund works similarly to an
exchange traded fund (ETF) rather than a mutual fund.
9. Enumerate the kinds of securities that could be traded in the financial markets.
- The following are the kinds of securities that could be traded in the financial markets:
a. Shares of Stock
- Shares of stock represent a division of a corporation's stock ownership
into units, allowing multiple people to control a portion of the business.
b. Bonds
- Corporations, municipalities, states, and sovereign governments utilize
bonds to fund projects and operations. Bondholders are the debtors, or creditors,
of the issuer.
c. Derivatives
- Derivatives are financial instruments that rely on contractually obligated
cash flows from another investment or index to determine their value.
d. Mutual Funds
- A mutual fund is a type of investment vehicle that pools money from a
number of investors and invests it in stocks, bonds, and short-term loans.
e. Debentures
- A debenture is a non-collateralized bond or other debt instrument. Due to
the lack of collateral, debentures must rely on the issuer's reputation and
credibility for backing. Enterprises and governments regularly issue debentures
to raise cash or funds.
f. Notes
- A note is a legal binding document that represents a loan or investment
made by an issuer to a creditor. Under notes, you must repay the principal
amount borrowed, as well as any predetermined interest payments.
g. Evidence of Indebtedness
- Evidence of indebtedness is a bond, a note, or any other written promise
to pay a public debt.
h. Asset-backed Securities
- The term "asset-backed securities" refers to a group of loans that have
been packaged and sold to investors as securities. Securitized loans include
home mortgages, credit card receivables, auto loans (including loans for
recreational vehicles), home equity loans, student loans, and boat loans.