Capital Markets and Investment Banking Process Paper

Capital Markets and Investment Banking Process Paper -...

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Capital Markets 1 CAPITAL MARKETS AND INVESTMENT BANKING PROCESS PAPER Capital Markets and Investment Banking Process Paper Jennifer Skorich University of Phoenix FIN 402 – Investment Fundamentals and Portfolio Management April 24, 2010
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Capital Markets 2 Capital Markets and Investment Banking Process Paper Investment banks provide an abundance of crucial services to the economy. The first important role of investment bank is to assist public and private corporations in raising funds for the capital markets. A second service is to provide strategic advisory services for mergers and acquisitions. These institutions also act as intermediaries in trading for clients. Investment banks differ from commercial banks, which take deposits and make commercial and retail loans. The focus of this paper is to describe the investment banking process including the function of portfolio construction. Part of the investment banking process is to help companies to raise funds through the initial public offering (IPO). The company appoints an investment bank for the underwriting. Underwriters assess and analyze companies past, current and future earning potential, industry stability, competition in the industry, and the market local and global to determine the issue of price. They also have other duties such as completion of mandatory documentation that is regulated. Underwriters charge a fee, which can be paid in a percentage of the IPO. To beginning portfolio construction asset allocation needs to be determined. In order to determine asset allocation it is necessary to ascertain the individual’s goal for the portfolio. The next thing that has to be considered is age of the person in comparison to the age they want to retire, if the person was married, and would be putting children
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This note was uploaded on 05/04/2010 for the course FIN FIN402 taught by Professor Sandymcdonald during the Spring '10 term at University of Phoenix.

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Capital Markets and Investment Banking Process Paper -...

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