Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Investment Banking > Investment Banking - Intro > Flashcards

Investment Banking - Intro Flashcards

1
Q

4 main areas of investment banking

A

a) Capital Market b) Advisory c) Trading & Brokerage d) Asset Management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the Critical Factors in investment banking

A

a) Government Regulations & Market Dynamics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Name the largest investment banks in the world

A

Barclays, Morgan Stanley, Goldman Sachs, Merrill Lynch, JP Morgan, Credit Suisse, CITI, Deutsche Bank

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What’s the main activity of investment bank

A

Security Underwriting. Investment banks bought bonds and stocks from the issuers and resold these securities to a group of investors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How investment banks have emerged in America?

A

American economy was growing too fast, commercial banks couldn’t cope with the pace to expand railroads, mining & other heavy industries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the main activities of a commercial bank

A

Deposit taking & Credit giving activities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What’s a spread

A

the difference between the interest that the bank pays to a depositor and the interest that it pays to the borrower. Spread = Interest Income - Interest Expense

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What’s commerical banks main source of revenue

A

Interest income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What’s a universal bank

A

banks that perform commercial and investment banking services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What’s Glass-Steagall act and which year it was enacted

A

Glass-Steagall act prohibited commercial banks involvement in investment banking activities and it was enacted in 1933.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Three main business units of Morgan Stanley

A

institutional securities, wealth management and investment management.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What the investment banking products encompass of?

A

a) Trading b) Asset Management c) Underwriting Debt & Equity d) Advisory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Two traditional activities that stand at the core of investment banking?

A

Underwriting Debt & Equity And Advisory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What’s the role of a Chinese wall?

A

The role of a Chinese wall is to create a barrier between different divisions (for example between Research and Underwriting) whose interactions will create a conflict of interest.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is Capital Markets service also called?

A

Underwriting Services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is Advisory service also called?

A

M&A and Restructuring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What’s ECM

A

Equity Capital Markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What’s DCM

A

Debt Capital Markets

19
Q

What’s founder’s interest?

A

The founders of a company want to sell at the right time and monetize their hard work.

20
Q

What are investors looking for?

A

Investors are looking to invest in a company that has great management and great potential.

21
Q

What’s investment bankers role in the IPO process

A

a) Provide Guidance b) IPO preparations c) Deal with investors d) Arrange meeting with Company’s management and Investors e) Stabilize the stock price

22
Q

Selling additional equity share is called?

A

SEO - Seasoned Equity Offerings

23
Q

What’s an acquisition?

A

When a company buys another company’s shares or assets.

24
Q

Bidders and Sellers

A

Buyers and Sellers

25
Q

M&A logic

A

the amount of money that the bidder wants to pay and the amount of money that the seller is asking

26
Q

When is restructuring necessary?

A

Restructuring is necessary when the firm cannot service its debts and in danger of going bankrupt.

27
Q

When the company is in need of restructuring, what are its alternatives?

A

A private workout or a bankruptcy procedure in the court

28
Q

What’s the golden goose of investment banking?

A

Trading & Brokerage

29
Q

What is trading & brokerage consists of?

A

Trading & Brokerage consists of buying and selling securities by using investment bank’s own money (proprietary trading) or buying securities on behalf of its clients (brokerage)

30
Q

How much revenue does the trading & brokerage activity contribute in an investment bank?

A

It contributes about 30-50% of revenue

31
Q

What’s market making?

A

Investment banks play a very important role in the liquidity of financial markets. Market making consists of buying of securities and being ready to sell these securities when the customer place an order

32
Q

What are the financial instruments do the investment banks trade?

A

Equity and fixed income instruments and derivative financial instruments (speculative reasons)

33
Q

Examples of derivative instruments?

A

Forwards, Futures, Options & Swaps

34
Q

What’s is an Asset Manager’s business?

A

Asset Managers are in the business of using money to make more money.

35
Q

What’s an Asset Management?

A

Asset Management is about managing clients’ investment and providing them with strategies and expertise that will help them achieve their financial goals.

36
Q

What is the spectrum of asset classes?

A

Stocks, Bonds, Commodities, Real Estate, Private Equity,

37
Q

What does an asset manager do?

A

high quality advice and superior risk return investments

38
Q

Different categories of stock?

A

Small Cap, Mid Cap, Large Cap, Blue Chip, Dividend Stocks, Stocks from growth region like BRIC countries

39
Q

Different categories of bond?

A

Short maturity, long maturity, Government, Corporate

40
Q

What are the other asset management categories

A

Commodities and Real Estate

41
Q

What are alternative investments for asset management?

A

Private equity or hedge funds

42
Q

What are the roles in asset management?

A

Sales force, Portfolio Manager and Research Department

43
Q

Who makes the investment decision and portfolio allocation?

A

Portfolio manager who takes the help of Research department to make investment decisions.

44
Q

What are the 5 largest funds in terms of AUM - assets under management?

A

Blackrock, Vanguard group, UBS, State Street and Fidelity

Investment Banking (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions