Key IB Terms
This financial ratio is used to determine a company's ability to pay off its short-term liabilities with its short-term assets.
What is the current ratio
What is the largest stock exchange in the world by market capitalization?
The New York Stock Exchange (NYSE)
Who is known as the "Oracle of Omaha"?
Warren Buffett
This term describes the percentage of a company owned by private equity investors.
What is equity stake
What did the football coach say when he went to the bank?
I want my quarterback!
This method of valuation involves discounting the expected future cash flows of a company back to their present value.
What is the Discounted Cash Flow (DCF) analysis
Name the market that deals with securities not listed on a stock exchange.
Over-the-counter (OTC) market
What major investment bank was the lead underwriter for Facebook’s IPO?
Morgan Stanley
This type of private equity investment involves injecting capital into established companies that are not publicly traded to help them grow or restructure.
What is growth equity
Why did the skeleton not rob the bank?
He didn’t have the guts
This type of debt security does not pay periodic interest and is instead issued at a discount to its redemption price.
What is a zero-coupon bond
What indicator is often used to gauge the performance of the industrial sector within the American economy?
The Dow Jones Industrial Average (DJIA)
Name the investment bank that famously went bankrupt in 2008, symbolizing the start of the financial crisis.
Lehman Brothers
This is the stage of investment that focuses on young, high-potential companies, typically right after seed funding rounds.
What is venture capital
Where to fish keep their money?
In the riverbank
his term describes the cost of a company financing itself through different sources of capital, including debt and equity.
What is the Weighted Average Cost of Capital (WACC)
What is the primary function of the Federal Reserve?
To regulate the U.S. monetary and financial system
This company was bought by J.P. Morgan during the 2008 financial crisis.
Bear Stearns
Named after a type of animal, this aggressive strategy involves buying out a company using a significant amount of borrowed money.
What is a leveraged buyout (LBO)
When does it rain money?
When there is a “change” in the weather.
In M&A, this term refers to the review that is conducted by a potential acquirer to confirm details of a transaction before it is finalized.
What is due diligence
Name the European equivalent of the NYSE.
Euronext
Name the largest M&A deal ever recorded as of 2024.
The acquisition of WarnerMedia by AT&T in 2018 valued at $108.7 billion.
This term refers to the final process in private equity where the firm sells its stake in a company, often through an IPO or sale to another company.
What is an exit strategy
What's the difference between a bond trader and a bond?
A bond matures