Plantijn Hogeschool Van De Provincie Antwerpen (AP)
Bedrijfsmanagement, Financiën En Verzekeren
Financial Markets
Summary
Samenvatting - Financial Markets
2 views 0 purchase
Course
Financial Markets
Institution
Plantijn Hogeschool Van De Provincie Antwerpen (AP)
Summary for the Financial Markets course given by Saïd El Majdoub in the second year of Business Management, Finance and Insurance. Let these (exam) questions test your knowledge.
Plantijn Hogeschool van de provincie Antwerpen (AP)
Bedrijfsmanagement, Financiën en Verzekeren
Financial Markets
All documents for this subject (1)
Seller
Follow
Studeerstudent
Content preview
Financial markets
, 1. What is the primary objective of the monetary policy of the ECB?
It’s primary objective is to maintain the price stability in the euro area and so preserve the
purchasing power of the single European currency.
2. In pursuing its primary objective and in controlling the monetary conditions, what are the
3 monetary policy instruments the ECB can make use of? Provide a brief description for
each instrument:
Interest rates = lower interest rates to borrow money with central bank will feed through
the banking system and result in lower lending rates
Open market operations = involves the central bank to buying and selling financial
instruments in order to influence of money circulating in the economy
Minimum reserve requirements = The central bank requires the credit institutions to hold
deposits on accounts with their national central bank.
3. What are the 5 keys functions of financial markets. Provide a brief description for each
function
Price setting & asset valuation = the value of an asset is worth no more or less than the
amount that someone is willing to spend on it (offer and demand). The markets bring
together buyers and sellers to provide price setting for individual assets
Capital Opportunities = Companies may require new funds to build factories, machinery and
so forth. Governments may wish to raise money to invest in public works or to manage
foreign exchange reserves.
Short-term financing = Companies and governments require working capital to pay
inventories or wages in short-term
Investment Opportunities = Companies and governments who don’t need money can invest
their surplus capital in order to generate a return.
Financial risk management = There is a trade-off between a return and the risk of an
investment. Financial market instruments will allow the companies to mitigate the risks by
hedging or diversification
4. What is the difference between a money market and a capital market?
A money market is associated with short term investments or borrowing of funds, where short term
is defined as one year or less
Capital market is associated with long term investments or borrowings.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Studeerstudent. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.35. You're not tied to anything after your purchase.
