CQIB FINAL EXAM LATEST
Role of Banks - ANSWERS-1. Act as financial intermediary between
savers and borrowers.
2. Facilitates the creation of money.
3. Creates financial products and services.
4. Develops mechanisms for transferring money and making payments.
5. Contributes to the development of the economy.
Debt Capital Markets - ANSWERS-When a large company or
government wants to finance a project, it may look to issue bonds to
raise capital.
An Investment bank would help out in planning/documentation of bond
issuance.
Equity Capital Markets - ANSWERS-When a company needs more
money in order to grow, they may look at undertaking an initial public
offering(IPO). Where it sells it's shares to the public/investors.
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, CQIB FINAL EXAM LATEST
The investment bank will put together a prospectus explaining the terms
of the
offering and the risks it carries, managing the issuance process and
helping the price of the offering.
Private Placements - ANSWERS-Where customers plan an offering of
bonds with an institutional investor such as
an insurance company or a retirement fund.
Can have be a quicker option as there is lower regulatory requirements.
Mergers and Acquisitions - ANSWERS-Where a company is looking to
buy another company, investment banks offer
advice on how the company should proceed with the acquisition,
including the pricing of the offer.
Deposits for a Bank - ANSWERS-Banks source their funds largely from
deposits.
Savings deposits - wages and salary.
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, CQIB FINAL EXAM LATEST
Fixed term deposits - lump sum deposited for a specific period.
Current deposits - business accounts.
Types of Bank Loans - ANSWERS-1. Overdraft
2. Credit card
3. Short term money loans
4. Long term loans
5. Bills of exchange and promissory notes
6. Equipment leasing and hire purchase
7. Trade finance
Bills of exchange and promissory notes - ANSWERS-Specialised
instruments, being an unconditional order in
writing between parties, where the bank purchases the bill amount from
the borrower, deducting charges.
On maturity the bill is presented to the borrower and the full amount is
collected.
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Role of Banks - ANSWERS-1. Act as financial intermediary between
savers and borrowers.
2. Facilitates the creation of money.
3. Creates financial products and services.
4. Develops mechanisms for transferring money and making payments.
5. Contributes to the development of the economy.
Debt Capital Markets - ANSWERS-When a large company or
government wants to finance a project, it may look to issue bonds to
raise capital.
An Investment bank would help out in planning/documentation of bond
issuance.
Equity Capital Markets - ANSWERS-When a company needs more
money in order to grow, they may look at undertaking an initial public
offering(IPO). Where it sells it's shares to the public/investors.
END OF
PAGE
1
, CQIB FINAL EXAM LATEST
The investment bank will put together a prospectus explaining the terms
of the
offering and the risks it carries, managing the issuance process and
helping the price of the offering.
Private Placements - ANSWERS-Where customers plan an offering of
bonds with an institutional investor such as
an insurance company or a retirement fund.
Can have be a quicker option as there is lower regulatory requirements.
Mergers and Acquisitions - ANSWERS-Where a company is looking to
buy another company, investment banks offer
advice on how the company should proceed with the acquisition,
including the pricing of the offer.
Deposits for a Bank - ANSWERS-Banks source their funds largely from
deposits.
Savings deposits - wages and salary.
END OF
PAGE
2
, CQIB FINAL EXAM LATEST
Fixed term deposits - lump sum deposited for a specific period.
Current deposits - business accounts.
Types of Bank Loans - ANSWERS-1. Overdraft
2. Credit card
3. Short term money loans
4. Long term loans
5. Bills of exchange and promissory notes
6. Equipment leasing and hire purchase
7. Trade finance
Bills of exchange and promissory notes - ANSWERS-Specialised
instruments, being an unconditional order in
writing between parties, where the bank purchases the bill amount from
the borrower, deducting charges.
On maturity the bill is presented to the borrower and the full amount is
collected.
END OF
PAGE
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