Chapter 6

1. Commercial bank provides financial services to the general public and is limited only to its functions, while a
universal bank acts as one umbrella for different services including commercial and investment. (p. 72, par. 2)

7. (a) BSP- streamlining the requirements on issuance of bonds and commercial papers by banks and
liberalizing the foreign exchange regulatory framework (p. 79, par. 2)
(b) SEC- approved amendments to SRC and Corporation Code, supporting bills ok regulating Collective
Investment Schemes, studies VCs, and investigates cybercrimes (p. 80, par. 2)
(c) Insurance Commission- adoption of international reporting practices, preparation for PFRS to be applied to
insurance companies, and requirement to keep reserves (p. 80, par. 1)

8. (a) Repricing, financing, repayment risk- assets and currency prices affected by normalization of US
monetary policy, economic growth affected by slowdown of global growth, and economies being vulnerable to
growth changes because of higher debt levels across countries (p. 85, par. 4)
(b) Developments in credit market- banks have increased their foreign currency debts to augment the growth
in domestic currency loans (p. 86, par. 2)
(c) Increasing credit demands by corporate business and households- one has to appreciate higher debt
levels against the potent risk from rising interest rates and peso depreciation (p. 87, par. 2)

10.Universal trends are starting to flourish and are being patronized by consumers around the world through
online platforms aiding the global economy. (p. 89B, par. 2) Still with the help of online platforms and woke
users, people are supporting local products which positively affects people’s personal lives and the Philippine
economy. (pp. 89C-89E)

Chapter 7

2. Public financial markets support national, state and local government, and other public activities whereas
corporate financial markets are where large corporations raise their funds from. (p. 95, par. 4)

3. Primary market is the original sale of securities where transactions raise money for either corporations or
governments. On the other hand, secondary market also known as stock market or exchange is where
securities can be traded among investors. (p. 101)

4. The basic functions of financial markets are raising capital, providing the grease for commercial
transactions to happen, price selling, asset valuation, arbitrage, investing, and risk management.

5. The principal sources of financial markets are either debt instrument which is a contractual agreement and
is either short-term or long-term, and equity instruments which are claims to share in a net income or asset of
a business. (p. 100, par. 1-2)

6. In the organized stock exchange, stock exchanges have physical location. Meanwhile, in the over-the-
counter exchange, shares, bonds, and money market instruments are traded using computer systems and
telephones. (p. 102, par. 1)

12. SEC granting a “Self-Regulation Organization” status to the PSE means that the stock exchange can
implement its own rules and establish penalties on erring trading participants and listed companies. (p. 105,
par. 3)

EXIOMO, HANNALIE L.
CBEA-01-401E