bny_mellon_20220116121236 Flashcards
TNA
Total Net AssetThe total assets of a company minus its liabilities.Total net assets or TNA is the total dollar value of the ETF. It’s the number of each company’s shares the ETF holds, times each company’s respective share price. example say you built an “S&P2” ETF. And it held 20 shares of Microsoft (ticker MSFT) and 10 shares of Exxon (XOM). Your ETF’s TNA would be $1,862 = [10 shares XOM x XOM’s $90.54 price per share] + [20 shares MSFT x MSFT’s $47.81 price] If you decided to issue 100 shares of the ETF, each share would be worth $18.62.
Shareholders
any person, company or other institution that owns at least one share of a company’s stock.shareholders are companys owners, when the company is doing good they reap the benefitsAlso unlike the leadership of other business types, companies with shareholders rely on aboard of directors and executive management to run things — meaning the actual owners, the shareholders, don’t have much say in the day-to-day operation of the business.
NAV
NAV = (assets - liabilities) / number of outstanding sharesvalue of a single unit of a mutual fund/ price per unit of a mutual fundwartosc jednego kawałka pizzypizza consists of flour cheese , totatosa mutual fund may consists of stocks, bonds, commoditiesNAV may be calculated daily/weekly/monthly - usuually at the tme of closing marketFor example, a mutual fund has $100 million of investments, based on the day’s closing prices for each individual asset. It also has $7 million of cash and cash equivalents on hand, as well $4 million in total receivables. Accrued income for the day is $75,000. The fund has $13 million in short-term liabilities and $2 million in long-term liabilities. Accrued expenses for the day are $10,000. The fund has 5 million shares outstanding. The NAV is calculated as:NAV = (($100,000,000 + $7,000,000 + $4,000,000 + $75,000) - ($13,000,000 + $2,000,000 + $10,000)) / 5,000,000 = ($111,075,000 - $15,010,000) / 5,000,0$19.21
Equity
- A stock or any other security representing an ownership interest. This may be in a private company (not publicly traded), in which case it is called private equity.2. On a company’s balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses). Also referred to as shareholders’ equity.Generally speaking, the definition of equity can be represented with the accounting equation:Equity = Assets - LiabilitiesIn accounting, equity (or owner’s equity) is the difference between the value of the assets and the cost of the liabilities of something owned. For example, if someone owns a car worth $15,000 but owes $5,000 on a loan against that car, the car represents $10,000 equity. Alternatively, equity can also refer to the capital stock of a corporation. The value of the stock depends on the corporation’s future economic prospects. For a company in liquidation proceedings, the equity is that which remains after all liabilities have been paid.
Bond
Its a way for government/companies etc to RAISE MONEYA bond is a debt investment in which an investor loans money to goverbment/corporation which borrows the funds for a defined period of time at a variable or fixed interest rate.When companies or other entities need to raise money (to finance new projects, maintain ongoing operations, or refinance existing other debts) they may issue bonds directly to investors instead of obtaining loans from a bank. The indebted entity (issuer) (dłużnik) issues a bond that contractually(umownie) states the interest rate (coupon) that will be paid and the time at which the loaned funds (bond principal) must be returned (maturity date).
Derivatives
In finance, a derivative is a contract that derives its value from the performance of an underlying entity.This underlying entity can be an asset, index, or interest rate, and is often simply called the “underlyingThe derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset.The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Some of the more common derivatives include forwards, futures, options, swaps
Corporate Actions
a process that will bring actual change to companys stock. Corporate actions are typically agreed upon by a company’s board of directors and authorized by the shareholders. Some examples are stock splits, dividends, mergers and acquisitions, rights issues and spin offs. Stock Splits As the name implies, a stock split (also referred to as a bonus share) divides each of the outstanding shares of a company, thereby lowering the price per share - the market will adjust the price on the day the action is implemented. A stock split, however, is a non-event, meaning that it does not affect a company’s equity, or its market capitalization. Only the number of shares outstanding change, so a stock split does not directly change the value or net assets of a company.A company announcing a 2-for-1 (2:1) stock split, for example, will distribute an additional share for every one outstanding share, so the total shares outstanding will double. If the company had 50 shares outstanding, it will have 100 after the stock split. At the same time, because the value of the company and its shares did not change, the price per share will drop by half. So if the pre-split price was $100 per share, the new price will be $50 per share.So why would a firm issue such an action? More often than not, the board of directors will approve (and the shareholders will authorize) a stock split in order to increase the liquidity of the share on the market.The result of the 2-for-1 stock split in our example above is two-fold: (1) the drop in share price will make the stock more attractive to a wider pool of investors, and (2) the increase in available shares outstanding on the stock exchange will make the stock more available to interested buyers. So do keep in mind that the value of the company, or its market capitalization(shares outstanding x market price/share), does not change, but the greater liquidity and higher demand on the share will typically drive the share price up, thereby increasing the company’s market capitalization and value.A reverse split might be implemented by a company that would like to increase the price of its shares. If a $1 stock had a reverse split of 1 for 10 (1:10), holders would have to trade in 10 of their old shares for one new one, but the stock would increase from $1 to $10 per share (retaining the same market capitalization). A company may decide to use a reverse split to shed its status as a “penny stock”. Other times companies may use a reverse split to drive out small investors.Dividends There are two types of dividends a company can issue: cash and stock dividends. Typically only one or the other is issued at a specific period of time (either quarterly, bi-annually or yearly) but both may occur simultaneously. When a dividend is declared and issued, the equity of a company is affected because the distributable equity (retained earningsand/or paid-in capital) is reduced. A cash dividend is straightforward. For each share owned, a certain amount of money is distributed to eachshareholder. Thus, if an investor owns 100 shares and the cash dividend is $0.50 per share, the owner will receive $50 in total.A stock dividend also comes from distributable equity but in the form of stock instead of cash. A stock dividend of 10%, for example, means that for every 10 shares owned, the shareholder receives an additional share. If the company has 1,000,000 shares outstanding (common stock), the stock dividend would increase the company’s outstanding shares to a total of 1,100,000. The increase in shares outstanding, however, dilutes the earnings per share, so the stock price would decrease.The distribution of a cash dividend can signal to an investor that the company has substantial retained earnings from which the shareholders can directly benefit. By using its retained capital or paid-in capital account, a company is indicating that it can replace those funds in the future. At the same time, however, when a growth stock starts to issue dividends, the company may be changing: if it was a rapidly growing company, a newly declared dividend may indicate that the company has reached a stable level of growth that it is sustainable into the future.
ETF
if an index fund and a stock had babies , their babies would be ETFsits an investment product that may consists of portfolio of securities from a specific sector or regionits a kind of an investment fund that can be traded like stocksan ETF holds assets ( stocks/commodities/bonds)most ETF’s track an index such as stock index or bond indexETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like featuresETF are like baskets, each basket holds actual securitiesa bond/fixed income basket will hold some corporate/government fundsa solar share basket will hold actual SHARES of companies that make solar panelsa gold basket holds gold bars (store elsewhere in a vault)EXAMPLE: say you want to invest 1000$ in GoldProblem : That kind of money is not going to buy much gold, about 1 ounce 27 grams, storing it under a pillow is riskyEasier and safer way : invest 1000$ in gold ETF, your not boying actual gold, youre buying shares of bigger basket of gold and that shares trade just like stock
SHAREHOLDERS RIGHTS
Though they are not involved in most decisions, shareholders do have rights, which are defined in the corporation’s charter and bylaws Shareholders have a right to inspect the company’s books and records sue the corporation for misdeeds of the directors and officers, for example Common shareholders are also entitled to vote on major corporate matters, such as who sits on the board of directors and whether a proposed merger should go through.Shareholders also have the right to attend the corporation’s annual meeting to learn about the company’s performance, or listen to the meeting via conference call Most importantly, in the event that a company liquidates its assets as a result of bankruptcy or dissolution, its shareholders have a right to a proportionate allocation of the proceeds. However, creditors, bondholders and preferred stockholders have precedence over common stockholders in a liquidation. Shareholders also have a right to receive a portion of any dividends the company declares.
Common vs. Preferred Shareholders
Many companies elect to issue two types of stock: common and preferred. Because common stock tends to be cheaper and more plentiful than preferred stock, most shareholders own this type of stock, meaning they can vote on company issues and receive dividends only when the board of directors deems it a suitable use of company funds. preferred shareholders do not enjoy the same voting rights as common shareholders, preferred shares typically pay a larger dividendpreferred share dividends are guaranteed and must be paid each year prior to any dividends being issued to common shareholders
WHAT’S AN INVESTMENT FUND
WAY of investing money alongside other investors in order to benefit from the advantages of working as a part of a groupadvantages of investing as a part of a group-hire professional investment managers-benefit from economies of scale like lower transaction costs-increase diversification to reduce risk
WHAT ARE THE ADVANTAGES OF AN ETF
-ACCESIBILITY - there are thousands ETFs, you have a lot to choose from, you can access a broad range of markets easily-diversification-transparency - they disclose their full holdings online at the daily basis (active funds for example have much lower transparency)-cost effectivenes - ETFs have lower costs because they dont try to outoerfor the market (which means ghiring professional managers) = MINIMAL COSTS OF MANAGEMENTliquidity- they are listed on a stock exchange you dont need to be wealthy- easy to sell and buy-low cost
WHAT IS AN EQUITY
- A stock or any other security representing an ownership interest. This may be in a private company (not publicly traded), in which case it is called private equity.2. On a company’s balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings (or losses). Also referred to as shareholders’ equity.Generally speaking, the definition of equity can be represented with the accounting equation:Equity = Assets - LiabilitiesIn accounting, equity (or owner’s equity) is the difference between the value of the assets and the cost of the liabilities of something owned. For example, if someone owns a car worth $15,000 but owes $5,000 on a loan against that car, the car represents $10,000 equity. Alternatively, equity can also refer to the capital stock of a corporation. The value of the stock depends on the corporation’s future economic prospects. For a company in liquidation proceedings, the equity is that which remains after all liabilities have been paid.
ASSET CLASSES
fixed income securitiesstocks(equities)cash equivalentsAn asset class is a group of securities that exhibits similar characteristics, behaves similarly in the marketplace and is subject to the same laws and regulations. The three main asset classes are equities, or stocks; fixed income, or bonds; and cash equivalents, or money market instruments. Some investment professionals add real estate and commodities, and possibly other types of investments, to the asset class mix.
Fund Accounting Junior Specialist
The duties and tasks you may expect to learn and be responsible for (among others) in those various teams are as follows: · the timely and accurate preparation and calculation of all areas of Centralised Expense process: from the initial preparation of the budget to the final processing of payments and adjustments in accordance with BNY Mellon standard procedures.· daily reconciliation of trades and cash positions, trade bookings & cash reporting.· assistance in the completion of net asset values (NAVs) for client funds in accordance with BNY Mellon standard operating procedures· preparation of cash and asset reconciliations and perform price tolerance checks· understanding & reviewing the terms of all derivatives contracts in order to accurately record these products on internal Accounting Systems.· monitoring the lifecycle of the derivatives & ensuring rates are updated, cash settlements are reconciled to Custody and positions are reconciled to the Counterparty· trade execution and order management, trade confirmation processing, trade reconciliation and settlement, portfolio pricing, position and P&L valuation· creation and delivery of daily standard client reporting with SAP Business Objects (German teams)· reviewing and ensuring that all tax deliverables, operational and first tax quality assurance related tasks are performed in accordance with new laws and regulations· on-boarding of clients at BNY Mellon and ensuring the correct tax service and reporting is applied· providing clear, complete and accurate answers to Money Transfer related queries with specific focus on root cause
