Term
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Definition
- Depositary institutions
- Assets: Loans (for nonfianancial firms, loans are liabilities, for banks they are assets)
- Liabilities: Deposits
- Consumer, Commercial, Real estate loans
- Also includes not secure debt
- They include more non-deposit sources of funds and hold loans broader in range than other depository institutions
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Term
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Definition
- Depositary institutions
- Savings and Loan association
- Specializes in accepting savings deposits and making mortgages and other loans.
- EX. Savings associations, savings banks, credit unions
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Term
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Definition
- Protection from adverse events
- Assumes risk for others
- EX. Life, property, casualty, rental
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Term
| Investment Banks and Securities Firms |
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Definition
- Underwriting securities
- Take the risk of holding and distributing securities themselves.
- Decide where to put the stocks in the market and how muchto release to the public.
- Securities brokerage
- Securities Trading
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Term
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Definition
- Financial Intermediaries that loan to both individuals and businesses.
- Do not accept deposits
- Rely on short-term or long-term debt for funding
- They loan to loan
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Term
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Definition
- Financial institutions that pool financial resources of individuals and companies and invest those in diversified portfolios.
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Term
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Definition
- Financial Institutions that offer savings plans for retirement
- These funds are tax-exempt
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Term
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Definition
- They usually invest in a company through negotiations
- Venture Capital: To create a new company or develop a small one
- Buy-out: Acquisition of a significant portion or majority control in a more mature company
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Term
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Definition
- Private investment funds charging a performance fee and typically open to only a very limited range of qualified investors.
- They often hedge their investments against adverse moves in equity and other markets
- Main objective: generate returns that are not closely correlated to those of the broader financial markets
- Being long and short on assets, using derivatives
- Global Macro: seeking assets mispriced relative to global alternatives
- Arbitrage (convertible, fixed-income, merger)
- Distressed Securities
- Emerging Markets
- Short selling, Funds of Funds, Derivatives
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