Magme Guru: FINANCE AWARENESS

Showing posts with label FINANCE AWARENESS. Show all posts

Thursday, February 6, 2020

SEMINAR February 06, 2020

FINANCIAL RISK MANAGEMENT - 10mins Seminar Notes

It is the practice of economic value in a firm by using financial instruments to manage exposure to risk.
Operational risk, credit risk and market risk, foreign exchange risk, liquidity risk, inflation risk, legal risk, reputational risk etc.
Financial risk management requires identifying its sources, measuring it, and plans to address them.

HOW DOES FINANCIAL RISK ARISE:

There are three main sources of financial risk:

Financial risks arising from an organization’s exposure to changes in market prices, such as interest rates, exchange rates, and commodity prices.
Financial risks arising from the actions of, and transaction with, other organizations such as vendors, customers, and counterparties in derivatives transactions.
Financial risks resulting from internal actions or failures of the organization, particularly people, processes, and systems.

EXAMPLES

Currency Risk
Interest rate risk
Inflation risk
Unexpected changes

OBJECTIVES OF RISK MANAGEMENT

Support strategic and business planning enhances communication between directors and departments
•    Support effective use of resources
•    Promote continual improvement
•    Helps focus internal audit programs
•    Fewer shocks and unwelcome surprises
•    Reassures stakeholders
•    Quick grasps of new opportunities

TECHNIQUES
•    Identify the risk
•    Measure the financial risk
•    Learn about investment
•    Turn to insurance policy
•    Build an emergency fund
•    Review financial ratings of bank
•    Diversify income sources

PROCESS
•    Determine the corporation’s objectives
•    Identify the risk exposures
•    Quantify the exposures
•    Assess the impact
•    Examine alternative risk management tools
•    Select appropriate risk management approach
•    Implement and monitor program

INSTITUTIONS
•    American risk and insurance association
•    Association of insurance and risk managers in industry and commerce
•    Global association of risk professionals
•    Institute of risk management
•    Professional risk manager’s international association
•    Risk and insurance management society

Presented By

Rakhi G
Banking Student
Magme School of Banking

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Friday, December 6, 2019

FINANCE AWARENESS December 06, 2019

FINANCIAL TERMS AND CONCEPTS - 03

Magme Guru Banking Finance Terms Concepts

FINANCIAL TERMS AND CONCEPTS - 03

51. Bequest: Something, usually property, given in a will.

52. BIC : Bank Identifier Code – a unique address which, in telecommunication messages, identifies precisely the financial institutions involved in financial transactions.

53. Bid/offer spread: An initial investment charge that refers to the difference between the buying and selling price of a unit on the stock market on any given day.

54. Bid price: The price that an investor in a unit trust can get for each unit if they cash them in.

55. Bond: A written promise made by governments and companies to repay any money borrowed, with interest, on a certain date in the future.

56. Bonus issue: An offer of free shares to a company’s shareholders, related to the number of shares they already have.

57. Book value: The value of a fixed asset, such as a building or machine, after depreciation, as recorded in an organisation’s accounts.

58. Books of account: Books that a business must keep to record its financial transactions accurately.

59. Booking fee: An amount a person pays to book something, for example a concert or plane ticket, to cover a company’s administrative costs.

60. Borrow: Get money that will be paid back.

61. Bounced cheque: A cheque that the bank refuses to pay out because the person who wrote the cheque does not have enough money in their account to pay for it.

62. Breach of contract: An act that breaks a legal duty agreed in a contract.

63. Break even: A point at which a company earns as much money as it is spending; with no profit or loss, it ‘breaks even’.

64. Bridging loan : A loan given by a lending institution to ‘bridge’ a time difference between buying a new home and selling the existing home.

65. Brokerage: Commission earned by a broker or a broker’s business.

66. Budget: A plan of spending over a certain length of time, based on how much money a person has

67. Budget deficit : A gap that occurs when a body, often a government, plans to spend more money than it takes in.

68. Building society: An organization owned by its members, who are some or all of the customers saving with or borrowing from the society.

69. Buildings insurance: An insurance policy that pays out if a person’s home is damaged, for example if tiles fall off a roof during a storm.

70. Bull: Someone who buys shares now, expecting that their value will rise in the future so that they can sell the shares for a profit at a later date.

71. Bureau de change: A place that changes all major foreign currencies, in cash or in travellers’ cheques, for a fee known as a commission.

72. Calendar month: A period of time that starts on the first day of the month and ends on the last day, as opposed to starting in the middle of one month and ending in the middle of the next.

73.Cancellation rights: A person’s or company’s right to cancel a contract.

74. Capital: An amount of money a person saves, invests or borrows, before interest or loss.

75. Capital charge: A charge that a unit trust manager takes out of the fund’s capital rather than out of the income it has generated.

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Wednesday, December 4, 2019

FINANCE AWARENESS December 04, 2019

FINANCIAL TERMS AND CONCEPTS - 02

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FINANCIAL TERMS AND CONCEPTS - 02

26. Articles of association: A company’s document that sets out the shareholders’ rights and the directors’ powers.

27. Asset: Something owned.

28. Asset management: A service from a financial adviser to spread a person’s investment between a number of assets, such as shares, Government bonds, cash and property, so that they can potentially earn more money.

29. Asset management: Insurance cover for an event that will definitely happen, such as death, rather than an event that might happen, such as fire or theft.

30. ATM: Automated teller machine – a computerised machine that allows bank customers to get information on their bank account, withdraw money or sometimes top up their phone in a public place, without dealing with another person.

31. Audit: An independent examination of an organisation’s records and accounts to make sure that they show a fair, accurate and legal reflection of the financial position of the company at the accounting date

32. Auditor’s report: A report by an independent person or firm on an organisation’s financial records

33. Authorised share capital: The highest amount of share capital that a company can issue, as set out by the company’s memorandum of association.

34. Available credit: The difference between a person’s credit limit and the amount of money they have already borrowed or spent on their credit card.

35. Balance: An amount of money, shown on a person’s statement, that they have in their account or that they owe at any time.

36. Balance brought forward: An amount shown on a person’s last statement that is brought forward to the next statement, either to show money saved or money owed.

37. Balance transfer: An amount a person owes on one credit or store card that they can switch to another credit card.

38. Balance sheet: A summary of a company’s assets (what a company owns) and liabilities (debts a company owes) at a point in time.

39. Balloon payment: A higher than normal final payment for a loan in return for lower regular repayments.

40. Bank : An organisation that invests and lends money.

41. Bank identifier code: A bank’s unique code, which is used when transferring money between banks, especially in different countries, and when exchanging messages; sometimes found on account statements.

42. Bankrupt: A situation of not having enough money to pay debts, declared by a court order.

43. Bankruptcy: A type of order issued by a court when a person cannot pay their debts when they are due, which allows the person’s property to be sold to raise money to pay their creditors.

44. Barter: A way of paying for things by exchanging goods and services instead of money.

45. Basic bank account: A service from a bank or building society that only lets a person spend what they have in their account so there is no risk of becoming overdrawn and running up overdraft charges.

46. Bear: Someone who sells shares now, expecting the share price to fall in the future so they can buy the shares back later at a lower price.

47. Benefactor: A person who gives a gift, for example in a will.

48. Beneficiary: A person who receives a gift.

49. Benefit statement: A statement, usually issued once a year, of the value of a person’s occupational pension.

50. Benefit-in-kind: A ‘perk’ of a job, such as a company car, gym membership or health insurance, that a company gives to its employees or directors and that may be subject to tax

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FINANCE AWARENESS December 04, 2019

FINANCIAL TERMS AND CONCEPTS - 01

FINANCIAL TERMS AND CONCEPTS - 01

1. Accidental damage: Damage to a person’s possessions by accident, such as spilling paint on a carpet, that is covered by some home insurance policies.

2. Account: A record of spending and income, provided by a bank, post office or building society

3. Accounting date: The last date of the period covered by an organisation’s annual accounts

4. Accumulation date: The date when income is reinvested in a unit trust, instead of being paid out to investors

5. Accumulation unit: A type of unit of income that a company reinvests in a unit trust instead of paying it out immediately to investors

6. Accurate figure: An exact reading from a meter to record how much gas or electricity a person has used

7. Actuary: An expert on pension scheme assets and debts, life expectancy and risk for insurance purposes

8. Acquisition : The buying of one company by another; also known as a takeover

9. Administration fee: An amount you pay for the time it takes staff to make changes to your financial product or service

10.AVC:Additional Voluntary Contribution: extra money that people in work related pension schemes can pay to increase their pension benefits

11. Affinity card: A credit card that allows a person to support an organisation such as a charity; every time a person uses the card to buy something, the credit card company makes a small donation to the organisation

12. After tax: An amount of money that a person is left with after they have paid tax

13. Agent: A person who deals with a range of suppliers from which it can issue a recommendation to a client

14. All risks: A home insurance policy that covers a person’s possessions even if they take them outside their home

15. Allocation rate: A percentage of a person’s money that has been invested in a fund; the remainder is spent on charges

16. Annual: Every year

17. Annual cover: An insurance policy that a person must renew every year, such as health or car insurance

18. Annual management charge: A charge or fee that a person must pay each year to the manager of an insurance policy, investment or pension fund, based on the value of a person’s fund

19. Annual service: A check made once a year on a piece of equipment to make sure it is working properly

20. Annuity: A regular amount paid out to somebody from an investment that is linked to a managed fund

21. Applicant: A person who applies for something

22. APR:Annual Percentage Rate: a percentage to show the amount of interest and other fees a person pays each year to receive a loan

23. ARF:Approved Retirement Fund: an investment plan that self-employed people, directors of family firms and certain other people can buy with the proceeds of their pension plan when they retire, which they can allow to grow or can cash in from time to time to provide an income.

24. Arrangement fee: A fee that a bank or building society charges a customer for arranging a loan

25. Arrears:An overdue amount that has not been paid

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