 Was designed to set rules and guidelines to
be followed to ensure balance among
individuals, firms and/ or citizens.
 Also designed to reconcile conflicting interests.
 It defined regulation as a process whereby the
designated government authority provides and
establishes rules for firms in the industry.
 Identified by law or by order to execute +++
 Sets regulatory measures to address certain
risks and social factors.
 What are those certain risks and social
factors.
 Is a factor that is considered to ensure the
dynamism and agility of the policy to adopt in
a fast-changing environment.
 Is the probability of a firm to fail its objectives
that may result in ripple effect to the economy.
 Is a factor that requires established policies to
consider the effect on the consumer welfare
 Policies should take into consideration the
alignment to the objectives of the society.
 Is a type of regulation whereby rules and
standards are set to oversee the ability of the
companies to establish and maintain
appropriate levels of capital to sustain ts
operations.
 Includes setting controls over the market
factors that will affect the financial
sustainability of the firms and players in the
industry.
 Reason why some players or firms failed to
survive.
 What are the market drivers?
 Governments are duty bound to regulate
competition in the financial sector.
 Has an important role in shaping the overall
economy of a country hence it is a must that
this must be regulated.
 The following activities are regulated in the
financial sector.
 The main determinant of competition
 Firms in the financial market must be able to
understand how to respond and maximize
their leverage in the industry and compete.
 Investors explore for investments which can
offer
 To prevent connivance in the market
 The behavior of the firms in the industry can
also be regulated.
 The behavior in the market can be
demonstrated through:
 will come into plan by setting parameters to
ensure that firms will comply with certain
standards to ensure integrity of the firms and
level the playing field.
 The government normally sets:
 Is considered as an important principle in the
business.
 Is normally demonstrated by firms through
their information disclosure and policies. The
firm must enable themselves to ensure that
they provide sufficient information to their
customers.
 Is a vital asset in financial markets.
 Is to set standards to regulate and ensure that
information provided in the market is ____,
______, and __________.
 Is a critical factor that firms should achieve in
the long run. Given that market behavior is
dependent on a lot of factors, the risk is very
high.
 Must be able to protect the interest of the
clients as well as the companies to enable
their corporate sustainability.
 Is a threat that arises where a segment or
firms is not able to meet its commitment
because of failure to address the risks of the
market.
 Have been referred to activities that deal with
funding certain transactions or expenditures .
 Are focused on the trading of securities and
financial instruments.
 Setting rules to set standards, control and
order on the financial activities, regardless of
the source.
 Key financial regulators in the Philippine
Financial Systems.
 Is an interrelated financial process which is
fueled by money.
 Is the availability of financial resources for
deployment in the financial system. It is
making the money available for use or for
trade or investment.
 Money supply balanced with the
 This balance is managed by:
 For the case of the Philippines, it is the
 Money will take the form of the following:
 Is expected to be regulated somehow to enable
the sovereign to have control of its economy.
 Is an essential factor in the financial system.
 For a monetary policy to be appropriate or
effective, the BSP must ensure the following
are present:
 Bangko Sentral ng Pilipinas is authorized by
the republic under
 What is its sole authority?
 Violators will be facing what?
 According to ________________ amending the
consolidated rules and regulations on
currency notes and coins issued in the Phil.
 The bank must observe the following for the
deposit of their notes.
 For the deposit of their coins, the following are
observed:
 Personnel in charge for setting up the controls
for financial institution.
 As of 2020 what are the countries using peso
as currency?
 As described by the bsp in its circulars, a
currency note shall be considered unfit for
circulation when?
 A currency coin shall be considered unfit to
circulation when?
 Unfit currencies are no longer allowed to be
used for circulation but may be presented for
 BSP may not accept the currencies if:
 Is practically based on the customer price
index.
 Is the weighted average value of the basket of
prices of all commodities representing the
market.
 The commodity groups in the consumer price
index are
 The degree of movement of the CPI from a
period to another is called
 Inflation is derived in
 Inflation is an indication of the
 In finance, inflation is
 Is one of the credible agencies that sets target
for the country’s inflation
 Is the body that determines the current
inflation based on the current movement of
the commodities set as index in the market
 Two types of inflation
 Captures the changes of the cost of the cost of
living based on the movement of the basket of
commodities as a whole
 Is used for most of economic commodities
since it excludes In the equation the
movement of commodities or incidents with
very volatile movement of outliers
 The business is not a business if without any
 In _____________ there are different ways to
settle an obligation after the delivery of
products or render of service.
 One of the modes of settlement is through
payment of the products or services through a
 Is a set of interrelated processes of settlement
of goods or services rendered in exchange of a
set of instrument that will undergo either
____________.
 There is no ideal or best methodology to
administer a
 Is dependent on the best amenable,
convenient and acceptable solution for both
parties i.e ______________
 Will work on a certain network or subsystems
that will link the parties grounded by certain
rules and procedures.
 According to BSP a payment system normally
requires the following:
 The literal arm’s length exchange of
transactions whereby the seller or obligor
deliver the goods or services while other party
deliver in the instance.
 This becomes a challenge because
 Already provides different ways to settle
obligations or make payments.
 It enables the settlement to be made through
______________________
 The ___________ with the other feature allows
___________ and __________--
 This shows that the payment system that
works within an infrastructure providing
efficient solution and real time processing of
payment may
 Given that the exchange is a contract between
the parties, it is essential that they also agree
on the manner on
 Although the payment made through cheques
is not that warranted, except if it is manager
cheque, some people still prefer this type.
 What is important in a payment system is that
 All transactions for purposes of controls are
charged to accounts payable account.
 Now, the settlement of these transactions
varies depending on the manner on how it is
agreed for settlement.
 The normal means of settlement
 Another key requirement for an effective
payment system is the
 Like any contract these information or
guidelines must be
 These agreements are normally provided by
the payment system facility to provide
guidelines and protection for both parties in
case breach as well protection of the system
that the transactions are cleared from the
settling party.
 These agreements are provided as a template
to all clients or users of the system.
 This provides a
 These policies sent by the banks or financial
intitutions are regulated by
 Is an essential facility to enable the complete
course of transaction.
 Based on the ______ and _______ of payment
system, BSP identified the following
importance of the system among others
 The payment systems are designed to
safeguard the identity and transaction as a
whole especially on
 Are deemed safe given that the characteristics
are __________________
 It is debited to the account of the payor real-
time
 Most of the system require _____________
before it is credited to the account of the payee
 The payor should not worry about the
potential interest due to missed payment as
long as it is clear that the reference should be
 Is required as part of the clearing process, but
most of the time, it is credited real time
especially for fund transfers.
 The ____________ adopts the use of the
 This allows individual and corporate tax
payers to file and pay their tax due.
 This payment system is a hybrid that is  In the emergence of the e banking system as a
primarily designed to encourage compliance in platform of payment system, but also widely
tax filing and facilitates the payment to used to facilitates the efficient settlement of
provide convenience to the taxpayers. the financial market transaction
 Since the payment system facility involve well  Is used to make future analysis or projections
defined parties and rules. Have verification of the investors. Can also be used to validate
process to allow the users validate the the credit rating of certain instruments before
transaction before completing the authority to completing the trade.
make payment. One advantage for established  Certain platforms are integrated with online
payment is the ___________________, everything brokerage companie to
can be made __________________, this
minimizes the _______, _________, _____
 Although it is an _____________, there are still
risks that need to be recognized upon using
payment systems.
 These risks are:
 System downtime and system “bugs” may
occur
 ability to calculate currently maturing
obligation
 ability of the payor to meet the full value of its
obligation due to unforeseen charges
 changes in rules and regulations
 risk that payment will be made on time
 is very important factor to consider that may
drives the business up or down.
 Relates to volatility of patterns in the
business.
 Risks that are inherent in every financing
transaction.
 Arise in the inability to make payment
consistently.
 Is to allow the business to self- liquidate or
self-finance.
 This type of risk may be quantified by
determining the probability of the borrower to
default in their payments in the duration of
the loan.
 Ensuring the business to be capable of
meeting all its currently maturing obligation.
Focusing on the entire liquidity of the
company or its ability to service its portion of
their debt as it comes due.
 This risk is quantified by determining the
__________ of the lender on the period within
which the borrower were able to recoup
 Is the impact of the market drivers to the
ability of the borrowers to settle the obligation.
 Is classified as a systematic risk because it
arises from the ________ or ________________
 Is the most difficult to quantify. The experts
and analyst can just only set certain
parameters to measure it.
 is dependent on covenants set and agreed in
between the lenders and the borrowers. Will
arise only on the ability of any of the parties to
comply with the covenants of the contract.
 The burden is to ________ to comply given that
the party to payback is them.
 The common defaults in the covenants are as
follows.
 It is not actual money or cash is being traded
but instead the financial instruments are the
one being exchange.
 These instruments are _________ and
_________________
 In the money market, The securities have 3
fundamental characteristics:
 Most money market instruments mature in
___________
 Transactions in the money market are not
confined to ___________
 The traders organize the purchasing snd
selling of the securities among participants
and close the __________---
 Money market securities have an
________________-
 Enables the parties to trade money market
instruments to cater to short-term financial
needs.
 In accounting perspective, most money market
instruments are considered as _______________
due to the fact hat the mature ______________
 Most transactions in the money market are
very large, hence, they are considered as
______________________-
 Dealers and brokers execute transactions in
the trading rooms of brokerage house and
large banks to
 Despite the limitations, individual investors
nowadays can invest in the money market by
 Allows the money market to be the preferred
place for firms to temporarily store excess
fiinds up until such time they are needed
again by org.
 Investors look at the money market as
 Any idle cash becomes an ______________ to
investors by means of the interest income not
earned by holding the cash.
 To reduce opportunity cost, ________ become a
viable option to temporarily invest idle funds.
 Also use money market instruments to attain
investment requirements or deposit outflows.
 On the other hand, money markets offer a
least expensive alternative for fund demanders
such as the
 sells government securities to raise funds
 allows the government to obtain cash until tax
revenues are collected.
 primary issuer of negotiable certificates of
deposits, banker’s acceptances, and
repurchase agreements.
 They issues treasury securities; sell
certificates of deposit and extends loans; offer
individual investors accounts that can be used
to invest in money markets
 Made investment through money market
mutual funds.
 buy and sell money market securities to
manage their cash
 trade securities on behalf of their clients
 help maintain a liquidity of the money market
since they make sure that sellers can easily
sell their securities when the needs arises.
 Companies raise money market instruments
 Lend funds to individual borrowers
 invest on money market to maintain liquidity
level in case of unexpected demands most
especially for property and casualty _______
 Maintain funds in money market as
preparation for long-term investing in stocks
and bonds market. Huge money market
investment is not necessary (Future obligation
are expected)
 permits small investor to invest in the money
market by accumulating funds from numerous
small investors to buy large denomination
money market securities.
 According to _____________________, _________
is a resource controlled by the entity as a
result of past events and from future economic
benefits are expected to flow to the entity.
 Assets can be classified in terms of physicality:
 Are assets that have physical properties and
can be easily seen, touch and perceived
 Are identifiable asset that do not have physical
substance and usually represent a legal claim
to some future economic benefit.
 Financial instruments is also called
 Basically intangible as future economic benefit
taked the form of a claim to cash that will be
received in the future
 Main vehicle used for transaction in the
financial market
 It may be presented under
 Two parties involved in a financial instrument:
 A party that issues the financial instrument
and agrees to make future cash payment to
the investor.
 The issuing party usually needs funds to
 Is the party that receives and owns the
financial instrument and bears the right to
receive the payment by issuer
 Usually have surplus funds that are not
earning anything and are
 .Financial instrument have 2 main economic
purposes:
 Money market instruments take the form of
 Are governed by Philippine regulations and are
influenced by market movements.
 In cases that certain financial instruments
were acquired more that 12 months before
maturity it will be reported under
_____________ except that the investor intended
to have it traded with the immediate reporting
cycle
 Government securities issued by the Bureau of
Treasury which mature in less than a year
 Three tenors:
 TS are quoted either by
 mature in less than 91 days
 Being government securities, these are no
longer ____________ same with the other
countries such as
 Banks that compose of the majority of the
__________ bid for the bills in the weekly
auctions held by the ______________-
 The banks then resell the _______ to the
 In _____, Phil. Government issued a ________
until 3rd quarter of the year
 TS have _________________ since the
government can always print more money that
they can use to redeem these security at
maturity
 Is also lower since the maturity term is
shorter.
 Market for TS is both
 Means that the market has numerous different
buyers and sellers.
 Means that securities can be quickly traded at
lower transaction cost.
 Are the safest investment instrument in the
market
 They are ______-
 They can be traded easily in the ____ anytime
the market is open
 Is not explicitly stated in TS
 TS are issued at a __
 The return realized by the investors comes
from the
 Treasury bills can be sold in two ways
 The BOT announces the quantity and type of
securities that they will sell. Interested parties
give a bid offering and the treasury accepts the
highest bids
 The treasury accepts bids in ____
 Each accepted bid is awarded at the _______
 Bidders only give the amount of securities that
they want to buy. The Treasury accepts all
________________.
 The price for all the securities under
noncompetitive bids isa set at the
 The main difference between the two methods
is that
 When analyzing investments, investors often
try to compare
 Most investors look at the percentages to be
 From the POV of investors, ___________+
indicates how much return
 The equation for annualized discount rate
 Another variation of the annualized discount
rate is what we call the
 It addresses two weaknesses of discount rate
 It portrays a more accurate representation of
how much an investor will earn from the
security since it uses the_____________ and
________
 Formula for Annualized Investment Rate
 Are also know to be very near to the definition
of ___________-
 Interest earned on TS bills are among the
__________
 Investors may find that earning from TS bills
may
 TS Bills are mostly meant as an
 Is a contract where a party which is a seller or
buyer of an instrument will agree to the buyer
or lender that the instrument will be
___________________
 It enables short term funds to be transferred
between ______ or ________, usually ranging
from _____________
 Some can also range from
 And these are called ___________ which do not
have an indicative date of repurchase.
 Are a key component of the debt securities
market that produces short term cash or
liquidity critical to ___________________
 They commonly use repos to manage liquidity
and take advantage of expected changes in
interest rates.
 sell their ____ to a bank with an accompanying
repo agreement promising to buy the
securities back at a specified future date
 Repos are
 In the Philippines, the government also uses
rep to
 The BSP purchases government securities
from a bank with a commitment to
 A repo transaction expands the level of money
supply as it
 Under a ___________, the BSP acts as the
______ of _____________, thus, the __________
reduces it reserve account resulting in a
___________
 For both repos, the BSP can only affect the
__________________, given that the parties
involved commit to __________
 At present, BSP enters into repo agreement for
a minimum of _________ for both repos and a
maximum of _______ and __________ for repo
and reverse repo agreement.
 Since repos are collateralized by the
_________________, these are usually treated as
____________________.
 While it is considered a ___________, still, a
risk may be inherent in the sense that there is
a __________________
 Are securities issues by banks which recorded
a deposit made. This certificate indicates
_________ and the __________ of the deposit.
 Since maturity date is stated in the certificate,
_______________ are treated as a ___________
with a ________________.
 It cannot be easily withdrawn by the _________
since it is different from a ____________
wherein money can be withdrawn upon the
_____________ of depositor.
 It essentially restricts holders form
withdrawing funds on ____________
 The concept behind the _________ is that
______ are willing to accept a ________________
in exchange for having ______________
 It is also classified as a __________________
 Whoever person or entity which possesses the
instrument upon maturity will receive the
__________ and _______. This feature allows
negotiable CDs to be _______ and ______
between investor.
 ______________ of CDs are based on the
outcome of the negotiation between the
__________ and the __________
 The interest rates of CDs are usually at the
same level with other money market securities
since it carries a ____________
 Investors can _____ and _______ certificate of
deposits up until the ______
 It may have a maturity period between ______
to _________. Upon the maturity, the bank
shall pay the ________________
 It allows and regulates the issuance of long
term NCDs.
 Refers to interest bearing NCDs with a
minimum maturity of ____________
 It offers a higher return compared to ________
because of the long term period that
depositors will be unable to withdraw money.
 In this case, _____ will be reported as ________
or the investor since the maturity is _____
 Unsecured promissory notes. It may be _______
or _____________
 Means evidence of indebtedness of any person
with a maturity of ______________
 Is evidence of indebtedness of any person with
maturity of ______________
 Since it is unsecured, only ______________ can
issue this security.
 Will not accept commercial papers from
___________ since they are going to assume the
___________ since this security is not secured.
 Are issued directly to the _____ and usually,
there is no ___________ for this.
 They may redeem commercial paper if the
bearer needs_____, but this seldom happens.
 They usually issue Commercial papers and
use the proceeds to fud loans that they extend
to their clients.
 Usually issue CP
 They often maintain a ____________with banks
to serve as ____________
 This is primarily for the benefit of the _______
of the _________
 They will lend funds to the issuer to enable
them to pay for the ______
 The availability of the ______ reduces the
__________ associated with ______ and this
reduces the _______________
 The issuer pays the __________ in exchange for
the __________
 Why did they agree to pay this?
 Commercial paper may either have a
 In the Phil., commercial papers are not
required to register with SEC if they meet the
ff requirements:
 Otherwise, they need to
 Refers to an order to pay a specified amount of
money to the bearer on a specified date.
 Are often used to finance _______________ that
have not yet been transferred for __ to the ____
 It is usually offered to ____ and _______
 When is Banker’s acceptance is formed?
 The BC of the draft translates to a
 The client then gives the ______ to the _______
to finance the purchase.
 This are usually payable to the __
 But it can be subsequently _________ and ___
until it matures.
 They are usually sold at _____ similar to ______
 They also facilitate the trading of BAs by
__________________
 ___________ von BAs is usually ______ since
______ is very minimal.
 Money market securities may be evaluated
based on _____________ and _____________
 Are very relevant in deciding which money
market securities to invest since this dictates
the _______ They tend to be relativlely _ as a
result of
______
 Money market securities have a very
___________ thus, they are _____________
 If a particular security may have interest rate
that deviates from the ______. ________ and
____ forces in the market would ultimately
correct it and force it back to the _________
 Refers to how quick, efficient and cheap it is to
convert security into cash.
 It is more liquid than ________ since they do
not have secondary market.
 Tend to hold the security until it matures.
 They may charge a higher fee for investors that
would want to liquidate its ______ since more0
effort shall be made to look for potential
buyers compared to ________ that have buyers
willing to purchase at short notice.
 They are often preferred by the investors who
desire _______ because. It provides ___ where it
did not previously exist.
 It is important determine at what amount an
investor is willing to pay in exchange for a
security.
 Money market securities can be valued using
the _________________--
 The interest rate used in the valuation shall
reflect the
 Investors may also use the ____________ in the
market for the type of security being
purchased.
 The valuation formula which is practically the
present value formula.
 As a general rule, as the _______ rises, the
_______ becomes lower. This means that
_______________
 Is a type of financial market where the debt
instrument or securities are transacted by
suppliers and demanders of finds.
 and ____________.
 Debt can be _________ or _________ on the
maturity.
 This is the reason why:
 Is a paper or electronic obligation that enables
the issuing party to raise funds with the
promise to return it to the lender in
accordance with the terms of contract.
 Type of debt instrument:
 These instruments provide a way for:
 A DI is _________ of a financial debt and the
promise of _________, plus _________
 The importance of DI is twofold:
 Without DI acting as means of to facilitate
trading, _________
 When a debt instrument is used as trading
means, _________ can be moved form
_________
 Types of Debt Instrument
 It come in the form of _________, _________,
_________, that have repayment terms of
_________
 Is the agreement that outlines the obligated
payment term between _________
 It allows a person to enter into a debt
agreement with a financing institution based
on the amount approved.
 In corporate finance, _________ usually comes
in the form of revolving lines of _________,
_________ that cover _________ needs and
_________.
 In personal finance, _________ are usually
_________, _________ or _________ like housing
loans.
 In _________, _________ normally take form of
_________ or _________
 The _________ serve as proof of claim normally
for a _________.
 The intent of issuing the instrument is
_________.
 The recovery must suffice the cost to finance
the ________________
 Refers to a _________, such as _________,
_________, _________, or ___________ that can
be brought or sold between ___________ and
has basic terms defines as ___________
(___________), ___________, and ___________ and
___________.
 Debt securities also include _________ such as
_____________, ___________, ___________ and
___________.
 Basic terms of a debt security
 Is largely determined by ____________;
____________
 It is also known as ____________, most debt
securities are traded ____________.
 The total peso value of debt security trades
conducted daily is ____________ than
____________. This are held by many large
institutional investors as well as ____________
 Are interchangeably used, however these two
are technically different. Not all ____________
are ____________.
 Is fungible, negotiable financial instruments
that holds some type of ____________.
 It may represent an ____________ (___________),
___________ (____________), or ____________.
 Some ____________ can be called ____________
since ____________ carry value on them.
 When they are exchanged in the market, the
realization will be in the form of ____________
and a ____________.
 Can be called security since they are backed
up by ____________ or ____________.
 Debt securities therefore are ____________ and
____________ which carry value on them.
 ____________ and ____________ are debt
instrument but are not ____________.
 Government bonds can be called ____________
and ____________ since they carry value that is
____________ in the financial market and that
____________.
 Debt insecurities include ____________ and
____________ such as
 Are debt securities with maturity of less that
one year.
 Money market securities of most interested
individual investors are ____________ and
____________
 Are debt securities with maturities of longer
than one year. Examples ____________
 ____________ have a ____________ because they
ensure that the principal amount is returned
to the lender at ____________.
 They are typically classified by ____________,
____________, and ____________.
 The riskier the bond, the ____________
 ____________, issued by government, have
____________ than ___________.
 Are both rated by agencies such as
____________ and ____________.
 ____________ have lower yields that
____________.
 Is a financial market which the participants
are provided with the issuance3 and trading of
debt securities.
 It primarily includes ____________ and
____________, facilitating transfer of capital
from savers to the ____________ or ____________
requiring capital for ____________, ____________,
and ____________.
 Participants can issue new debt in the market
called ____________
 Trade debt securities in the market called
____________.’
 These products are typically in the form of
____________, but they may also come in the
form of ____________ and ____________.
 The goal of bond market is to provide
____________
 The participants of the bond market are nearly
the same as the ____________
 The participants in bond market :
 Participants include:
 These project may be in the form of
____________, ____________ and ____________
 Types of Bond Markets
 Provide ____________ to raise money for
different reasons such as ____________ or
____________.
 Is usually used for long term debt instrument
that provide maturity of at least one year.
 They issue ____________ and entice buyers by
providing the face value on the agreed
maturity date with ____________.
 The characteristics of GB makes it attractive
for ____________
 It is what the local government and their
agencies, states, cities, special- purpose
districts, public utility districts and other
government-owned entities issue
 ____________ on real estate properties provide
____________.
 These are locked in by pledge of particular
assets. They pay ____________, ____________, or
____________ interest.
 Is a financial security collaterized by a pool of
assets such as ___________, ____________,
____________, ____________ or ____________
 For ____________, these are an alternative to
investing in ____________.
 It is similar to a ____________, except that the
____________ are not ____________
 Are used to finance or fund environmental or
social initiatives and programs, or projects or
both.
 This type of bonds starts to gain popularity in
the ____________ is ____________.
 According to the ____________, the bonds
should not be comingled with the other
projects and should conform with the core
components of the bond such as
 4 components of the bonds
 Is a debt instrument that provide =s a steady
income stream to the investor in the form of
coupon payments.
 At maturity date, the full face value of the
bonds is repaid to the ____________
 The characteristics of a regular bond include:
 Some bonds have interest rate also called
____________ which paid to bondholders based
on the agreement.
 Is the fixed return that an investor earns
periodically until it matures.
 It is multiplied to the principal to arrive at the
interest to be paid.
 All bonds have ____________
 When the bond matures, the ____________
repays the investment the full face value of the
bonds.
 For corporate bonds, the face value is
 For government bonds, the face value is
____________
 The ____________ is not necessarily the
____________ or ____________ of the bond.
 Depending on the ____________, the investor
may purchase a bond at at par, below par or
above par. The ____________ depends on the
level of interest rate in the market.
 To determine the appropriate interest rate or
rate, the following factors should be
considered assuming the cash flows already
established:
 In finance, ____________ can be determined by
____________ and ____________ on the difference
between ____________ and the ____________
 The formula for interest.
 Is a rate that assumes zero default in the
market which is more or less equivalent to the
rates offered be the ____________.
 The normal basis of the ____________ is the
____________
 In the ____________, this can be found through
the ____________
 Is an organized market that was formed out of
the financial distress in ____________.
 This group provides full financial services from
____________, ____________ and ____________.
 The group is composed of four corporation:
 Their trading service arm
 For the securities services
 For their payments and transfer services.
 As their training center.
 Main supplier of the bank reserves, it cannot
set the real interest rates because ___________.
 The risk free rate should be calculated as :
 Another way to calculate the interest rate on
debt securities.
 The interest rate is dependent on the -
____________¸ ____________, and ____________.
 The movement of the yield may be _________,
____________, ____________,
 Most theories expect that interest rate
increasing as maturity lengthens.
 May change or move differently as expected
especially when the inflation is ____________, or
the purchasing is ____________.
 Is the interest rate or yield available or
applicable for a particular time. Are already
atucal rates and are not hedge.
 When the agreement is ____________, the
applicable interest rate is based on the
____________ at the particular time.
 Wiill be used to ____________ by referring to
historical yield ____________ the forces that
occur in those times.
 Is a way on how to mitigate the impact to the
lender or funds return and the borrowers cash
flows to service the debt or loans on the
should the interest increased beyond their
expectation.
 Normally contracted rates that fix the rates
and follow another party to assume such risk
on the difference between the ____________ and
____________.
 Is a contract rate where a fixed exchange for a
certain market rate at a certain maturity.
 Usually one used as reference is ____________
 For ____________, it is normally the
____________ of a currency ____________
 Is a technique for determining the theoretical
fair value of particular bond.
 It includes calculating the present value of the
bonds future interest payments also known as
____________, and the bond’s value upon
maturity also known as ____________
 Because a ____________ and ____________ are
fixed, an investor uses ____________ to
determine ____________ is required for a bond
investment worthwhile.
 Formula that describe on how to value bond.
 Since bonds are essential part of ____________,
____________ and ____________ seek to
understand how the ____________ interact in
order to determine the ____________.
 An integral step in bond investing
 Is calculating the ____________ of a bonds
expected ____________
 The theoretical fair value of a bond is
calculated by ____________
 Is the rate of return that an investor will get if
they reinvested every coupon payment from
the bond at a ____________ until the bond
matures.
 It consider the ____________, ____________,
____________, and ____________
 Makes no annual or semi-annual coupon
payments for the duration ofb the bond.
 It is sold at a ____________ to par when issued.
 The difference between the ____________ and
____________ is the ____________ of the bond.
 To calculate the value of zero-coupon, we only
need to find ____________
 Is the same regardless of when a cashflow is
received.
 Also called ____________.
 The spot rate used to discount the cash flow of
a non-treasury security is the ____________
plus a constant ____________.
 The drawback of this approach.
 Dealer firms typically construct a ____________
for a particular rating based on the
____________.
 Is the relationship[ between the interest rates
and bond yields and different terms or
maturities.
 When graphed, ____________ is also known as
____________ and it plays a central role in ____.
 The term structure reflects expectations of
market participants about ____________ and
____________
 It increases with maturity
 The lower the rating , the ____________
 The resulting term structure is uses to value
bonds issuers of the same credit quality. This
term structure is referred to as ____________.
 Another driver of interest rate or risk
consideration are the ____________
 It affects the confidence level of the investors
to countries or companies.
 This are determined by ____________ that are
recognized globally that objectively assigns or
evaluates countries and companies based on
the ____________
 The ____________ is primarily driven by their
ability to ____________ and ____________
 The higher the grade, the ____________
 # major rating companies:
 The credit ratings provided by these
companies are just ____________ and will serve
as ____________ and is not an ____________ to
the companies
 Is an American financial services corporation
was founded in ____________ by ____________ in
____________
 This company uses data gathered from
____________ using more that ____________ to
assess ____________ to the industry.
 The credit rating provided by ____________
were categorized to ____________ and
____________ and scaled from ____________ to
____________
 Is the credit rating company particularly on
debt securities established in ____________ in
____________. They gather information from
____________ countries more than ____________
nonfinancial corporate issues and more than
____________. The company employs more than
____________ across the world.
 3rd credit rating agency that was found in
____________ in ____________ owned by
____________
 Is global information and services company.
 Provides credit opinions based on the credit
expectations based on the ____________ certain
____________ and ____________ that drive a
company.
 They conduct assessment more than
____________ around the globe with
____________ different countries.
 In ____________, Philipines was assed by
____________ at ____________ with a
____________ while ____________ last evaluation
was in ____________ at ____________ also
____________. ____________ rated the country in
____________ a ____________ with ____________
 US were rated as ____________ by ____________
in ____________ with ___________. ____________
is ____________ with ____________ in
____________, while ____________ latest ratin in
____________ with ____________ at ____________.
 The other credit rating are ____________ and
____________
 Was established on ____________ in
____________. The 4th largest ratings agency.
 Observe almost ____________ worldwide. It also
has offices in ____________, ____________,
____________ and ____________. The rating
follows from ____________ to ___________.
 Started its operation in ____________ based in
____________. It is based in ____________ with
partners in ____________ =, ____________,
____________, and ____________Other than
____________ they also have about ____________
regional officers that aims to provide
information to investors to serve as guide as
they enter into the new investment. They use
____________ to ____________ as least.
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