ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yes, I understand this from the notes
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No, I don’t understand this from the notes
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No, I don’t understand this, as I have not read the notes
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None of the above
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Detailed explanation-1: -Bank capital is the difference between a bank’s assets and its liabilities, and it represents the net worth of the bank or its equity value to investors. The asset portion of a bank’s capital includes cash, government securities, and interest-earning loans (e.g., mortgages, letters of credit, and inter-bank loans).
Detailed explanation-2: -What are capital notes? Capital notes are complex financial instruments that combine features of both bonds and shares. This is part of a broader category known as hybrid securities which also include convertible bonds, preference shares and capital notes.
Detailed explanation-3: -Put simply, capital is the money that a bank has obtained from its shareholders and other investors and any profit that it has made and not paid out.
Detailed explanation-4: -Capital stock is the amount of common and preferred shares that a company is authorized to issue-recorded on the balance sheet under shareholders’ equity. The amount of capital stock is the maximum amount of shares that a company can ever have outstanding.