SASB 1 Vocab

Question 1

Private Equity (PE)

Answer 1

Ownership or interest in an entity that is not publicly listed or traded. A source of investment capital, private equity cokes firm high-net-worth individuals and firms that purchase stakes in private companies or acquire control of public companies with plans to take them private and delist them from stock exchanges. * Private equity investors increasingly rely on sustainability information, they recognize ESG investing as a means to improve portfolio performance, mitigate risk, and generate alpha.

Question 2

Equity and Equity Investing

Answer 2

Money that is invested in a company by purchasing shares of that company in the stock market. Equity is the value of shares issued by a company.

Question 3

Fixed-Income and Fixed-Income Investing

Answer 3

Fixed income is an investment approach focused on preservation of capital and income. It typically includes investments like government and corporate bonds, CDs and money market funds. Fixed income can offer a steady stream of income with less risk than stocks.

Question 4

Fixed Income vs Equity

Answer 4

Fixed-income investments pay regular interest and tend to have less risk, making them favorable to risk-averse investors. Equities, on the other hand, can have high returns, but also tend to be riskier. In addition, equities often do not pay regular interest. * Equity and fixed income investors alike increasingly rely on sustainability information to support risk analysis, identify signals of future volatility and value declines, and protect portfolio value.