How to Learn Banking, Trade & Investments: 218 Flashcards from Bonds to the Basel Accords
Study guide to the Banking, Trade & Investments deck: 218 flashcards on financial instruments, CAPM, VaR, WACC, fractional reserve banking and bank regulation.
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Banking, trade and investment vocabulary is the kind of knowledge that looks simple until an exam or an interview asks you to define maturity transformation or explain what a clearing house actually does. The Banking, Trade & Investments deck on Flip It (deck code NA6723) packs 218 flashcards into one place: the three branches of finance, every major financial instrument, the maths behind portfolios, the history of banking from the Knights Templar to the Basel Accords, and the day-to-day plumbing of retail and investment banks.
Study this deck: Banking, Trade & Investments
1 / 10Finance
Tap the card for the answer · swipe right if you knew it, left if not
Sample cards from the deck
| Front | Back |
|---|---|
| Financial intermediary | An entity (like a bank) that channels funds from savers to borrowers, earning the difference between interest paid and received |
| Diversification | Spreading investments across different assets to reduce risk exposure to any single asset or risk |
| Weighted average cost of capital (WACC) | The average rate a company expects to pay to finance its assets, weighted by the proportion of debt and equity |
| Value at risk (VaR) | A statistical measure of the maximum potential loss in a portfolio over a specified time period at a given confidence level |
| Exchange-traded fund (ETF) | An investment fund traded on stock exchanges, holding stocks, bonds or commodities, similar to mutual funds but traded like stocks |
| Immunization in finance | A strategy to shield a bond portfolio from interest rate risk by matching duration of assets and liabilities |
| Lender of last resort | An institution (usually the central bank) that lends to banks facing liquidity shortages |
| Maturity transformation | Banks borrowing short-term (deposits) and lending long-term (loans) |
| How did fractional reserve banking emerge? | Goldsmiths began lending out deposited gold while keeping only a fraction in reserve |
| How do Islamic banks earn profit? | Through profit markup and fees on financing, not interest |
What the 218 cards cover
The deck moves in five rough blocks, which is also the order we suggest studying them:
- Foundations — personal, corporate and public finance; equity vs debt financing; bonds, stocks, options, futures and swaps; the role of central banks.
- Investment theory — risk management, market risk, portfolio optimization, active vs passive management, CAPM, asset pricing theory, arbitrage pricing, financial mathematics, Monte Carlo methods, stochastic volatility, behavioral finance, Louis Bachelier.
- Risk and insurance — VaR, leverage, volatility, exotic derivatives, enterprise risk management, credit insurance, longevity risk, actuarial reserves, regulatory capital, ESG investing.
- History and regulation — the world's first futures exchange, ticker tape, the Knights Templar, goldsmiths and fractional reserve banking, the Basel Accords, FDIC, capital requirements, bank capital ratios.
- Banking operations — retail, commercial, investment, universal, ethical, postal savings and Islamic banks; spread, netting, clearing houses, NEFT, trade finance, certificates of deposit, checking accounts, debit cards, ATMs, online banking, promissory notes, liens, risk-based pricing, disintermediation and consumption smoothing.
Two study tips specific to this deck
1. Study in pairs of opposites. Much of the deck is built on contrasts: equity vs debt financing, active vs passive management, retail vs investment banking, market risk vs credit risk, Islamic profit markup vs conventional interest. When a card comes up, force yourself to recall its counterpart before flipping. You memorise two definitions for the price of one and, more importantly, you learn where the boundary between them sits.
2. Attach every mechanism to the intermediary card. The card Financial intermediary (channelling funds from savers to borrowers and earning the spread) is the hub of the whole deck. Maturity transformation, spread in banking, lender of last resort, fractional reserve, capital ratios, disintermediation — each one is either a consequence of intermediation or a protection against its failure. Ask "what would go wrong for the intermediary?" and the definition of most banking cards writes itself.
Suggested pace
Foundations and instruments first (about 40 cards), then investment theory and risk — the densest block (CAPM, VaR, WACC), so rewrite each back in your own words before rating yourself. Finish with history, regulation and banking operations, which are short factual cards that go fast once the theory is in place. A full 218-card review cycle takes around 20 minutes.
Sign in at flip-it.app, search the library for Banking, Trade & Investments or the code NA6723, and start flipping.
If you are also preparing for accounting exams, pair this deck with our accounting essentials guide (GAAP, IFRS, auditing).
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