Role Flashcards
what are the two main markets of capital markets
primary and secondary
what are the three streams of the capital markets internship (rotations)
sales & trading,
debt/equity capital markets,
prime services and origination
what are debt capital markets
providing advice on raising debt for acquisitions, refinancing of existing debt or restructuring of existing debt. Work with client to organise borrowing and provide access to a global pool of investors
what is the difference between refinancing and restructuring
refinancing: initiating a new contract to pay off the loan
restructuring: altering an existing contract (ie lengthening due date)
what are equity capital markets
providing advice of equity, equity-linked and equity derived products, including shares, futures, swaps and options. Work with client to organise transactions, structure the equity offering and improve valuation
what are some activities ECM will advise on
marketing, distribution of new stock, IPOs, roadshows (pitching stock to AM, hedge funds, pension), equity private placements
what kind of bonds are there
investment grade (low risk, low interest rate),
high-yield,
government,
emerging market bonds,
municipal bonds (variety of government bodies such as cities, school districts, counties)
what are swaps
over-the-counter contracts primarily between businesses or financial institutions customised to meet needs of both parties. Most common interest rate swap
what is sales and trading
sales: call institutional investors with ideas and opportunities
trading: execute orders and advise clients on entering and exiting financial positions
why are sales people important in an IPO
when an IB agrees to underwrite an IPO, they commit to selling a specified number of shares at a specified min price
what do traders do (S&T)
traders buy and sell securities either on behalf of investment firm (prop trading) or on behalf of clients (agency trading).
When large order of shares need to strategically spread out buying in order to not influence market price
what is a prime brokerage
special group of services for hedge fund and institutional clients, securities lending, leveraged trade execution and cash management
where does a prime broker sit with regards to the client and its brokers
prime broker can be the agent between the client and all of its brokers, providing a central source for closing and servicing assets
what does synthetic mean
term given to financial instruments that are created artificially by simulating other instruments with different cash flow patterns,
created in form of a contract
what is leveraged trade execution
leverage involves borrowing a certain amount of the money needed to invest in something
