Capital Markets

Question 1

Fixed income in both markets (Debt and Capital) is because…

Answer 1

They sell in the secondary markets

Question 2

Fixed income:

Answer 2

o Corporate bonds
o Trust certificates (CPOs: cert de part ordinaria)
o Medium term notes (CEBURES o Pagarés)

Question 3

Variable income:

Answer 3

o Stocks
o REIT (Real Estate Investment Trust  FIBRA (Fideicomiso de infraestructura y bienes raices)
o Development capital certificates (DCC)  CKD (Certificado de capital de Desarrollo)
o Warrants
o Etf (Exchange traded funds)

Question 4

Trust certificates (CPO y CPI (Certificado de Participación Inmobiliaria)) (FIXED INCOME)

Answer 4

• Right to a future cash flow
• Publicly traded
• Classification by method of participation
  Amortizable: the investor gets paid the capital periodically and the Interest (returns)
  Non amortizable: the investor only gets the capital at the end of the term
• Classification by type of participation
  Ordinary Participation Certificates: any asset or project. (Roads)
  Investment Participation Certification: only Real Estate

Question 5

• Development capital certificates, DCC; (CKDs, Certificados de Capital de Desarrollo)

Answer 5

• Securities designed to finance long term development projects.
• Only for institutional investors
• No nominal value (you pay only the right of the cash flow)
• Just in Mexico
• Sold in Mexican stock exchanges

Question 6

Investment Project Securities (CerPis, Certificados Bursatiles de Proyectos de Inversion, also for international projects)

Answer 6

• Only for institutional investors
• Sold OTC
• Like CKDs but open to domestic or international projects.

Question 7

Structure notes:

Answer 7

• Financial security created by a financial institution to mix fixed and variable income.
• Financial securities traded OTC.
• Linked to an underlying asset.

Question 8

REITS, Real Estate Investment Trusts (FIBRAs, Fideicomisos de Inversion y Bienes Raices)

Answer 8

• Securities on a trust of different buldings
• The holders gets a periodical payment
• Sold on stock exchanges
• Publicly traded, but can only be acquired by qualified investors or institutions.
• Many buildings, CPI just one.

Question 9

ETF

Answer 9

INVESTMENT FUND DESIGNED TO TRACK THE PERFOMANCE ON A GROUP OF STOCKS.
- Can be traded on stock exchanges
- Settlement period: - T+2days
- Sold on stock exchanges

Question 10

Trackers

Answer 10

• Replicate the performance of a specific index.
• Made by each financial institution. Traded OTC

Question 11

Warrants

Answer 11

• Derivate sold on stock exchanges
• Option to buy or sell a security