Session 1

Question 1

Evergreen fund

Answer 1

a fund that provides capital for new companies and makes regular injections of capital to support their development.

Evergreen funding: A situation in which a start-up receives funding in small amounts over a long period of time. This differs from an IPO or some venture capital investments, which tend to be large, one-time-only capital infusions. This tends to be a lower risk arrangement for those providing capital to the start-up, because if it fails in the meantime, no further capital infusions will be required.

Question 2

Open end fund

Answer 2

is a collective investment scheme which can issue and redeem shares at any time. An investor will generally purchase shares in the fund directly from the fund itself rather than from the existing shareholders. It contrasts with a closed-end fund, which typically issues all the shares it will issue at the outset, with such shares usually being tradable between investors thereafter.

Question 3

Mezzanine financing

Answer 3

Is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies.

—paagard!—

Question 4

Bylaw

Answer 4

a rule made by a company or society to control the actions of its members.
CFA bylaws

Question 5

Litigation

Answer 5

the process of taking legal action: the company wishes to avoid litigation.

da’vie ghazayi

Question 6

Proctor

Answer 6

/praakter/

moraghebe emtehan

Question 7

Solicit

Answer 7

Ask for, seek

he called a meeting to solicit their views

Question 8

Retention

Answer 8

negahdari, hefz

the retention of direct control by central government

Question 9

Road show

Answer 9

A presentation by an issuer of securities to potential buyers. Road shows refer to when the management of a company that is issuing securities or doing an initial public offering (IPO) travels around the country to give presentations to analysts, fund managers and potential investors.

Question 10

Buy side–Sell side

Answer 10

The side of Wall Street comprising the investing institutions such as mutual funds, pension funds and insurance firms that tend to buy large portions of securities for money-management purposes. The buy side is the opposite of the sell-side entities, which provide recommendations for upgrades, downgrades, target prices and opinions to the public market. Together, the buy side and sell side make up both sides of Wall Street.

Question 11

Trust

Answer 11

1. A trust is a financial arrangement in which a group of people or an organization keeps and invests money for someone.
   The money will be put in trust until she is 18.
2. A trust is a group of people or an organization that has control of an amount of money or property and invests it on behalf of other people or as a charity.
   He had set up two charitable trusts

Question 12

Collateralized mortgage obligation(CMO)

Answer 12

A collateralized mortgage obligation is a special purpose entity that receives the mortgage repayments and owns the mortgages it receives cash flows from (called a pool). The mortgages serve as collateral, and are organized into classes based on their risk profile.

Question 13

Certificate of deposit(CD)

Answer 13

A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC..

Question 14

Swap

Answer 14

the exchange of one security for another to change the maturity (bonds), quality of issues (stocks or bonds), or because investment objectives have changed.

Question 15

Fiduciary

Answer 15

involving trust, especially with regard to the relationship between a trustee and a beneficiary.

the company has a fiduciary duty to shareholders.

Question 16

Proxy voting

Answer 16

voting on behalf of someone else.

Before the annual shareholder meeting, packets of information containing the proxy statement are sent to all shareholders. The proxy statement contains information about the topics to be covered at the annual meeting, including nominations for the board of directors and the pay packages of the top five executives. There are also proposals from management as well as shareholder proposals.

Question 17

Soft dollars

Answer 17

The term soft dollars refers to the payments made by mutual funds (and other money managers) to their service providers. The difference between soft dollars and hard dollars is that instead of paying the service providers with cash (i.e. hard dollars), the mutual fund will pay in-kind (i.e. with soft dollars) by passing on business to the brokerage.

Let’s take a look at an example: Wittenberg LLP provides MegaMutual Fund with computer equipment and software for transmitting investment information. Under an agreement or understanding between the two firms, MegaMutual will pay for these services by directing trades through to Feral Hitch, a large brokerage firm. Feral Hitch will charge an added fee onto the trades from MegaMutual. The money from these fees will then be sent to Wittenberg, which, in turn, gets its compensation for its services to MegaMutual. The added fee usually amounts to tenths of a cent, but because MegaMutual trades billions of shares a day, the amount adds up to real money - the fee it would’ve had to pay in hard dollars.

Soft dollars are a way for mutual funds to get services without having to pay for them directly. A hard dollar payment would require a check to be issued and recorded on MegaMutual’s books, and the corresponding expense to be passed onto investors via the fund’s annual fee. Under soft dollars, the expenses are hidden in the trading costs. While the practice is not illegal and the end result is the same (the investors pay), it does not help investors analyze the costs of using one mutual fund versus another.

Question 18

Commingle

Answer 18

mix, blend

the bank’s commingled fund

Question 19

Averse

Answer 19

opposed to, against
mokhalef, bizar

risk averse investors.
he was averse to secrecy.

Question 20

Offset

Answer 20

counterbalance, balance (out)
jobran kardan, khonsa kardan
the deficit has been more than offset by capital inflows.

noun: 1. enheraf- 2. moteadel konande
an offset against taxable profits.
these wheels have an offset of four inches.

Question 21

Short position

Answer 21

1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value. 2. In the context of options, it is the sale (also known as “writing”) of an options contract.

Question 22

Long position

Answer 22

1. The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value. 2. In the context of options, the buying of an options contract.

Question 23

Endow

Answer 23

(with)
vaghf kardan

he endowed the church with lands.

Question 24

Endowment fund

Answer 24

An endowment fund is created when a donor or the Board of Trustees specify that a gift is to be invested and only the income earned on that gift may be spent for a specific purpose. The gift amount is referred to as the principal or corpus and is held in a fund that is managed by the Finance Department.

Question 25

Buyout

Answer 25

the purchase of a controlling share in a company, especially by its own managers.

Question 26

Downside risk

Answer 26

Downside risk is the financial risk associated with losses. That is, it is the risk of the actual return being below the expected return, or the uncertainty about the magnitude of that difference.

Question 27

Substantiate

Answer 27

prove

they had found nothing to substantiate the allegations.

Question 28

Volatility

Answer 28

unpredictability, navasani budan

interest rate volatility.

In finance, the volatility of key indicators, such as stock prices, the unemployment rate and, especially, interest rates is critically important. Volatility is a measure of variability over a specific time period. While there are various ways of measuring this metric, a simple measure of interest rate volatility is how much interest rates move up or down, on average, per day, week or month. Other measures such as standard deviation and variance are more complex, but in essence, they measure the same thing: how wildly interest rates tend to increase or decrease, on average, over a specified time period.

Question 29

Leverage

Answer 29

1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. 2. The amount of debt used to finance a firm’s assets.

Question 30

Whereby

Answer 30

ke be mojebe aan
by which

a system whereby people could vote by telephone.

Question 31

Inherit

Answer 31

be ers bordan

she inherited a fortune from her father.

Question 32

Broker/dealer

Answer 32

When executing trade orders on behalf of a customer, the institution is said to be acting as a broker. When executing trades for its own account, the institution is said to be acting as a dealer. Securities bought from clients or other firms in the capacity of dealer may be sold to clients or other firms acting again in the capacity of dealer, or they may become a part of the firm’s holdings.

Question 33

Due diligence

Answer 33

Due diligence is an investigation of a business or person prior to signing a contract

Question 34

unsolicited

Answer 34

nakhaste

unsolicited junk mail.

Question 35

Fund of funds

Answer 35

is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities.

Question 36

Monte Carlo vs historical simulation

Answer 36

Monte Carlo:
1. complex– 2. answers only as good as assumptions about the distributions and parameters– 3. doesn’t give analytical insight

Historical:
1. uses the actual distribution of risk factors so no need to estimate– 2. suffers from the fact that past data may not be a good indication of future– 3. rare possible events will not come up unless they’ve happened in the past– 4. we cannot ask what if questions unlike monte carlo, cannot investigate the effects of changes in distributions, parameters, etc.