An overview of corporate financing - Financial markets and institutions

5 important questions on An overview of corporate financing - Financial markets and institutions

What are primary issues?

When a bank raises money from investors to issue new shares

What Is an Exchange-Traded Fund (ETF)?

An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.

What is a hedge fund?

A hedge fund is a limited partnership of private investors whose money is managed by professional fund managers who use a wide range of strategies, including leveraging or trading of non-traditional assets, to earn above-average investment returns.
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Name 3 ways in which a hedge fund is different from mutual funds

  1. Because hedge funds usually follow complex investment strategies, access is restricted to investors such as pension funds, endowment fund,  and wealthy individuals
  2. Hedge funds are generally established as a partnership. The investment manager is the general partner and the  investors are limited partners
  3. Hedge funds try to attract the most talented managers by compensating them with potentially lucrative performance related deals.

What is a hedge fund?

A mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds.

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