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remember as B PERCCT (b percent)
Banks and Development Financial Institution
is a short term credit instrument created by non-financial firm and guaranteed by a bank to pay
issued by SBP on behalf of Federal Govt. There are only long term debt securities from 3 to 30 years
Features of PIB
remember as WIZITS (visits)
Withholding tax @10% applicable on interest
Issued on Par Value
Zakat is not applicable
The Central Bank - like SBP
sample standard deviation
U.S dollar deposited in foreign banks outside the United States or in foreign branches of U.S banks
Repos and Reverse Repos.
Repurchase agreement(repos) a form of overnight borrowing backed by govt. securities
opposite of repo. Dealer buys govt. securities from investors and sell them back at later date
term of borrowing is more than 30 days
Call Money Market
a non-collateralize clean lending/borrowing of rupee funds on an overnight basis
Brokerage of Call Money
No of days x Principal x *0.0325 (brokerage rate)
is interest bearing deb instrument offered by financial institutions
short term govt. securities. mature in one year or less from their issue date
Y=(S-P)/P times 365/N. P: Purchase, S: Sell and N: Number of days
Short-term debt securities issued most commonly by the federal government.
funds in the accounts of commercial banks at the Federal Reserve Bank
an agreement involving the sale of securities by one party to another with a promise to repurchase the securities at a specified price on a specified date; essentially a collateralized fed fund loan with collat…
an unsecured short-term promissory note issued by a corporation to raise short-term cash, often to finance working capital requirements; generally sold with maturities of 1 to 270 days (if maturity is greater than 270 d…
Negotiable Certificate of Deposit
Bank-issued time deposit that specifies an interest rate and maturity date and is negotiable, (can be sold by the holder to another party).
Time draft payable to a seller of goods, with payment guaranteed by a bank.