Introduction to Financial Markets and Institutions
What is the name of a system of transferring funds from those who have excess funds to those who need to obtain extra funds in an economy?
The financial system
Which investments are for longer terms with the aim of building a long-lasting financial relationships in a foreign country?
Foreign direct investments
Which investments are considered for shorter terms with the aim of gaining the highest possible return for assumed financial risks?
Portfolio investments
What is a financial intermediary?
It is an organization that collects the savings and funnels them to parties in need.
What are the most dominant financial intermediaries, in Turkey?
Commercial banks
What are the key components of a financial system?
Ultimate lenders, ultimate borrowers, financial instruments, financial intermediaries, and legal-administrative regulations.
What are the primary regulatory organizations, in Turkey?
The Central Bank, Capital Markets Board, Undersecretaries of Turkey, and Banking Regulation and Supervision Agency.
Which theory is explaining the movements in the general level of market interest rate in a particular country?
Loanable funds theory
What are the most financial instruments of money markets?
Deposit accounts and short-term bonds (issued by government or firms)
What are the most common financial instruments of capital markets?
Long-term bonds (issued by government or firms) and stocks.
What is the meaning of informational efficiency?
Informational efficiency is the degree of speed and cost of important information to reach market participants in the financial markets.
What is a risk?
Risk refers in general to the magnitude and likelihood of unanticipated changes that
have an impact on a firm’s cash flows, value or profitability.
What is it called to calculate future value?
Compounding
What is it called to calculate present value?
Discounting
What is an expected return?
Expected return is the return that an individual expects to have from an asset over a period of time.
What is the meaning of liquidity?
Liquidity is the ease and quickness of an asset to be bought and sold at an acceptable value, or price that is not below the actual value, or price.
What is a security?
A security is a financial instrument, which is a kind of negotiable paper, showing claims
on future cash flows of the issuer of the security.
What is the meaning of stability?
Splitability is a term describing how much minimum amount of money is needed in
order to buy a security.
What is an unemployment insurance fund?
Unemployment insurance fund is a government created fund which is used to assist individuals who have lost their jobs.
What is the name of the banks, which collect funds participation accounts and provide
loans.
Participation Banks