Chartered financial analyst cfa a designation given

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Chartered Financial Analyst (CFA): A designation given to professionals who complete a multi-part exam designed to test accounting and investment knowledge and professional ethics. Chinese Wall: The separation between public and private sections of an investment bank, including sales, trading & research from corporate finance. Many banks even have physical barriers and/or e-mail restrictions to support this effort. Collateralized Debt Obligation (CDO): A type of structured product or derivative, comprised of multiple tranches of debt of different companies.. These debt tranches typically take the form of loans or bonds. Commercial bank: A bank that lends, rather than raises, money. For example, if a company wants $30 million to open a new production plant, it can approach a commercial bank for a loan. Commercial paper: Short-term corporate debt, typically maturing in nine months or less. Commitment letter: A document that outlines the terms of a loan a commercial bank gives a client. For example, in a $5 billion transaction underwritten by three banks, the commitment letter would outline the amount each bank would underwrite and the corresponding terms. Commodities: Assets (usually agricultural products or metals) that are generally interchangeable with one another and therefore share a common Visit the Vault Finance Career Channel at – with insider firm profiles, message boards, the Vault Finance Job Board and more. 167 C A R E E R L I B R A R Y
Customized for: Jingwen Wu ([email protected]) Ecole Polytechnique Online Career Library Vault Career Guide to Investment Banking Appendix © 2007 Vault Inc. 168 price. For example, corn, wheat and rubber generally trade at one price on commodity markets worldwide. Common stock: Also called common equity, common stock represents an ownership interest in a company. (As opposed to preferred stock, see below.) The vast majority of stock traded in the markets today is common, as common stock enables investors to vote on company matters. An individual who owns at least 51 percent of a company’s stocks controls the company’s decisions and can appoint anyone he/she wishes to the board of directors or to the management team. Comparable company analysis (Comps): The primary tool of the corporate finance analyst. Comps include a list of financial data, valuation data and ratio data on a set of companies in an industry. Comps are used to value private companies or better understand a how the market values an industry or particular player in the industry. Consumer Price Index (CPI): The CPI measures the percentage increase in a standard basket of goods and services. The CPI is a measure of inflation for consumers. Convertible bonds: Bonds that can be converted into a specified number of shares of stock.

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