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investment banking

investment banking

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Published by: allaji3 on Feb 28, 2011
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04/18/2014

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An investment bank is different from your traditional bank down the street in the sense that it does not

keep any deposits with itself to pay you an interest nor does it guarantees the "safekeeping" of your money. An investment bank is more specialized organization that takes in your money and after analyzing the possible risks and economic conditions gives you advice to convert it into more money. The services provided by Investment Banks takes many forms: securities underwriting, stock and bond trading, facilitating mergers and acquisitions, arranging and funding syndicated loans and providing financial advice to companies on aspects like pricing of securities. A broader and better definition of investment banking is to think of investment banking as an industry, which either trades directly in capital market products or uses the underlying capital markets, to construct different financial products So an Investment Banker is an individual or institution who/which acts as an underwriter or agent for corporations and municipalities issuing securities. Most also maintain broker/dealer operations, maintain markets for previously issued securities, and offer advisory services to investors. investment banks also have a large role in facilitating mergers and acquisitions, private equity placements and corporate restructuring

Investment bank. An investment bank is a financial institution that helps companies take new
bond or stock issues to market, usually acting as the intermediary between the issuer and investors. Investment banks may underwrite the securities by buying all the available shares at a set price and then reselling them to the public. Or the banks may act as agents for the issuer and take a commission on the securities they sell. Investment banks are also responsible for preparing the company prospectus, which presents important data about the company to potential investors. In addition, investment banks handle the sales of large blocks of previously issued securities, including sales to institutional investors, such as mutual fund companies. Unlike a commercial bank or a savings and loan company, an investment bank doesn't usually provide retail banking services to individuals.

A financial intermediary which operates at the 'wholesale end' of the financial markets; the 'middleman' between companies issuing securities to raise funds and the investors who buy the paper. Investment banks derive their income chiefly from fee-based activities or profits from trading securities rather than from a margin between borrowing and lending costs. Investment banks help their clients by underwriting and distributing securities and devising innovative finance packages (in return for fees). Investment banking skills rely on market knowledge and expertise rather than on the strength of the bank's balance sAccrued


heet

revenue: Revenue is recognized before cash is received. Accrued expense: Expense is recognized before cash is paid out.

An expense incurred but not yet paid. A firm incurs certain expenses such as wages, interest, and taxes that are paid only periodically. From the time expenses are incurred until the date they are paid, expenses accrue in a firm's balance sheet.

Accrued revenue refers to revenue that has been incurred but not yet received. Examples of accrued revenue items might be services you have provided but that have not yet been billed or paid for. The service industries account for a large number of accrued revenue transactions, since quite often services are provided over a week, month, or even year, but aren’t billed until the job is complete.

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