Markets & Economy
What does GDP stand for?
Gross Domestic Product
What does DCF stand for?
Discounted Cash Flow
What is a stock?
Security that represents ownership in a corporation
What do investment banks help companies raise?
Raise capital or M&A, or sales and trading
What CEO is known for tweets moving stock prices?
Elon Musk
What is the term for a prolonged decline in economic activity?
Recession
Why might two companies in the same industry have very different valuation multiples?
- Probability and margins
- Risk profile
- Capital structure
- Corporate governane
What does it mean to “go long” a stock?
Buying a stock with the expectation that its value will rise over time
What is an IPO?
Initial Public Offering. The process by which a private corporation offers shares to the public in a new stock issuance for the first time
What company was the first to reach a $1 trillion market cap?
Apple
What does the Federal Reserve primarily control to influence the economy?
They control short-term interest rates and the money supply
What financial statement provides the inputs for Free Cash Flow?
Statement of Cash Flows and/or Income Statements
What ratio measures a company’s price relative to its earnings?
P/E Ratio (Price-to-earnings)
What division focuses on buying/selling securities for clients (think trading floor)?
Sales & Trading division
This cryptocurrency started as a joke with a dog but became worth billions.
Dogecoin
What market is known for trading previously issued securities? Give an example.
What market is known for trading previously issued securities? Examples: NYSE, NASDAQ, OTC markets, bond markets, real estate, etc.
What discount rate is typically used in a DCF model?
WACC (weighted average cost of capital)
What is diversification meant to reduce?
Unsystematic risk (specific risk or idiosyncratic risk)
What type of banking focuses on loans to large corporations?
Corporate or Commercial banking
This phrase describes when everyone suddenly starts buying the same hyped stock
What is a bubble/hype cycle
What yield curve shape is often seen as a predictor of a recession?
Inverted yield curve (upward sloping)
What is the GGM used to calculate? What does GGM stand for?
Gordon Growth Model. It calculates intrinsic value of a stock
What is beta used to measure in investing?
Measure of a stock's volatility or systematic risk
What role involves advising high-net-worth individuals on investments and estate planning?
Wealth Management (PWM or Private Banking)
This billionaire investor famously says to “be greedy when others are fearful and fearful when others are greedy."