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Credit Risk

The risk of loss of principal or loss of a financial reward stemming


from a borrower's failure to repay a loan or otherwise meet a contractual
obligation. Credit risk arises whenever a borrower is expecting to use
future cash flows to pay a current debt. Investors are compensated for
assuming credit risk by way of interest payments from the borrower or
issuer of a debt obligation.
Credit risk is closely tied to the potential return of an investment,
the most notable being that the yields on bonds correlate strongly to their
perceived credit risk.

Trade Cycle

A trade cycle is composed of periods of Good Trade, characterized


by rising prices and low unemployment percentages, shifting with periods
of bad trade characterized by falling prices and high unemployment
percentages.

Risk Management
The process of identification, analysis and either acceptance or
mitigation of uncertainty in investment decision-making. Essentially, risk
management occurs anytime an investor or fund manager analyses and
attempts to quantify the potential for losses in an investment and then
takes the appropriate action (or inaction) given their investment
objectives and risk tolerance. Inadequate risk management can result in
severe consequences for companies as well as individuals. For example,
the recession that began in 2008 was largely caused by the loose credit
risk management of financial firms.

Mergers & Acquisition


Mergers and acquisitions are both aspects of strategic management,
corporate finance and management dealing with the buying, selling,
dividing and combining of different companies and similar entities that
can help an enterprise grow rapidly in its sector or location of origin, or a
new field or new location, without creating a subsidiary, other child entity
or using a joint venture.
A merger is a legal consolidation of two companies into one entity,
whereas an acquisition occurs when one company takes over another
and completely establishes itself as the new owner (in which case the

target company still exists as an independent legal entity controlled by


the acquirer).

Corporate Action
A corporate action is an event initiated by a public company that
affects the securities (equity or debt) issued by the company. Some
corporate actions such as a dividend (for equity securities) or coupon
payment (for debt securities) may have a direct financial impact on the
shareholders or bondholders; another example is a call (early redemption)
of a debt security. Other corporate actions such as stock split may have an
indirect impact, as the increased liquidity of shares may cause the price of
the stock to decrease. Some corporate actions such as name change have
no direct financial impact on the shareholders. Corporate actions are
typically agreed upon by a company's board of directors and authorized
by the shareholders. Some examples are stock splits, dividends, mergers
and acquisitions, rights issues and spin offs.

Portfolio Management
Portfolio management is the art and science of making decisions about
investment mix and policy, matching investments to objectives, asset
allocation for individuals and institutions, and balancing risk against
performance.
Portfolio management is all about strengths, weaknesses, opportunities
and threats in the choice of debt vs. equity, domestic vs. international,
growth vs. safety, and many other trade-offs encountered in the attempt
to maximize return at a given appetite for risk.

Working Capital

Working
capital (abbreviated WC)
is
a
financial
metric
which
represents operating liquidity available to a business, organization or
other entity, including governmental entity. Along with fixed assets such
as plant and equipment, working capital is considered a part of operating
capital. Gross working capital equals to current assets. Working capital is
calculated as current assets minus current liabilities.[1] If current assets are
less than current liabilities, an entity has a working capital deficiency, also
called a working capital deficit.