The goal of the investors is to help the company grow and become more profitable so that they can sell it for more money than they paid for it. They usually do this by making changes to the company’s operations or management to improve its performance.

Private equity investors often buy companies that are struggling or in need of a change in direction. They may also invest in smaller companies that have the potential to grow quickly but need additional resources to do so.

Private equity can be extremely profitable, but risky because there is no guarantee that the company will become more profitable or that it will be easy to sell later on.

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Hedge funds aim to generate higher returns than traditional investments, such as stocks and bonds, by using a variety of investment strategies. These strategies can include investing in a wide range of assets, such as stocks, bonds, commodities, currencies, and derivatives, and they can also involve short-selling or borrowing to amplify gains or mitigate losses.

Unlike mutual funds, hedge funds are typically not subject to the same regulations and restrictions. For example, they can invest in riskier assets, use more leverage, and charge higher fees.

Due to their complex strategies and higher risks, hedge funds are generally not suitable for the average investor. However, they can provide opportunities for wealthy investors to potentially earn higher returns, although with greater risk.

Check out some of the highest-paying areas of finance.

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The exam consists of four parts: (1) Auditing and Attestation, (2) Business Environment and Concepts, (3) Financial Accounting and (4) Reporting, and Regulation. Each part of the exam has multiple-choice questions as well as simulation questions that test a person’s ability to apply accounting and finance concepts to real-life situations.

To become a CPA, you need to meet certain educational requirements, such as completing a certain number of college credits in accounting and finance. After meeting these requirements, you can apply to take the exam. The exam is computer-based and can be taken at testing centers across the country.

Preparing for the CPA exam requires a ton of time and effort. It’s recommended that you study for several months before taking each part of the exam. There are many study materials available, such as textbooks, online courses, and practice exams. Many people choose to enroll in review courses that provide a structured approach to studying for the exam.

Passing the CPA exam can open up countless career opportunities in accounting, finance, and business in general.

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In finance, we have something similar. The front office is like the store’s front, and it’s where the people who work with customers or clients are located. For example, investment bankers, traders, and financial advisors work in the front office. They’re the ones who help clients make financial decisions, buy and sell stocks and bonds, and manage portfolios.

The back office is like the store’s back. It’s where the people who manage the finances and paperwork of the company are located. For example, accountants, compliance officers, and operations specialists work in the back office. They’re the ones who make sure that everything is running smoothly, that transactions are processed correctly, and that the company is following all the rules and regulations.

Finally, we have the middle office, which is like the store’s middle. It’s where the people who support both the front and the back office work. For example, risk managers, data analysts, and IT professionals work in the middle office. They’re the ones who help the front office make informed decisions by providing data and analysis, and they help the back office by providing technical support and improving processes.

Click here for a detailed explanation of the Front Office.

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The CFP exam is made up of several sections that test a planner’s knowledge of financial planning concepts. The sections cover topics such as financial planning, retirement planning, estate planning, investment planning, and tax planning.

To prepare for the exam, financial planners usually take courses in financial planning and study on their own. They also gain experience working in the field of financial planning, which helps them better understand the topics covered in the exam.

The CFP exam is a challenging test, and it’s important for financial planners to be well-prepared before taking it. However, passing the exam is an important achievement that can help a financial planner demonstrate their expertise to clients and employers.

Check out the Resources page for CFP Exam prep!

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The CFA program consists of three levels, each of which involves taking a six-hour exam. The exams are typically held once a year, and it can take several years to complete all three levels.

The (1) first level of the CFA exam covers topics such as ethical and professional standards, financial reporting and analysis, corporate finance, economics, and quantitative methods.

The (2) second level focuses on asset valuation, including equity investments, fixed income, derivatives, and alternative investments.

The (3) third level covers portfolio management and wealth planning, including strategies for managing assets and analyzing financial statements.

The CFA program is known for being very challenging, and many people study for hundreds of hours in order to pass each level of the exam. The material covered in the exam can be complex, and it requires a strong understanding of finance and economics.

Passing the CFA exam is a significant achievement and can be a valuable credential for people working in finance. It demonstrates a high level of knowledge and expertise in the field, and can help people advance their careers and increase their earning potential.

Click here for other common financial certifications.

Also, check out the Resources page for CFA Exam prep!

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1. IPO (Initial Public Offering): This is when a company sells its shares to the public for the first time. When a company “goes public” through an IPO, it raises money from investors who buy its shares on a stock exchange like the New York Stock Exchange or NASDAQ. The investment bank helps the company prepare for the IPO by providing financial advice, underwriting the shares, and assisting with the regulatory process.

2. M&A (Merger and Acquisition): This is when one company buys another company, or when two companies merge to become one. An investment bank can help a company looking to buy another company by providing financial advice and helping to structure the deal. The investment bank may also provide financing for the deal by raising money from investors or by lending money to the acquiring company.

3. Debt Financing: This is when a company borrows money from investors instead of selling shares. The investment bank helps the company issue bonds or other types of debt securities to investors. The investment bank may also help the company negotiate the terms of the debt, such as the interest rate and maturity date.

4. Equity Financing: This is when a company sells shares to investors to raise money. Unlike debt financing, which requires the company to pay back the money it borrows, equity financing does not have to be repaid. The investment bank helps the company prepare for the equity offering by providing financial advice, underwriting the shares, and assisting with the regulatory process.

5. Restructuring: This is when a company is in financial distress and needs to make significant changes to its operations or finances in order to survive. The investment bank helps the company by providing financial advice, negotiating with creditors or investors, and assisting with the restructuring process.

The post Types of Deals in Investment Banking appeared first on the finance major.

1. IPO – Initial Public Offering
2. M&A – Merger and Acquisition
3. PE – Private Equity
4. VC – Venture Capital
5. IB – Investment Banking
6. ECM – Equity Capital Markets
7. DCM – Debt Capital Markets
8. LBO – Leveraged Buyout
9. FX – Foreign Exchange
10. FICC – Fixed Income, Currency, and Commodities
11. CDO – Collateralized Debt Obligation
12. CDS – Credit Default Swap
13. ABS – Asset-Backed Security
14. CMBS – Commercial Mortgage-Backed Security
15. MBS – Mortgage-Backed Security
16. ROE – Return on Equity
17. ROA – Return on Assets
18. EPS – Earnings Per Share
19. P/E – Price-to-Earnings Ratio
20. ESG – Environmental, Social, and Governance
21. FCF – Free Cash Flow
22. DCF – Discounted Cash Flow
23. CAGR – Compound Annual Growth Rate
24. AUM – Assets Under Management
25. NAV – Net Asset Value
26. IRR – Internal Rate of Return
27. WACC – Weighted Average Cost of Capital
28. EBITDA – Earnings Before Interest, Taxes, Depreciation, and Amortization
29. GAAP – Generally Accepted Accounting Principles
30. SEC – Securities and Exchange Commission
31. FINRA – Financial Industry Regulatory Authority
32. CFA – Chartered Financial Analyst
33. CPA – Certified Public Accountant
34. FINTECH – Financial Technology
35. ETF – Exchange-Traded Fund
36. REIT – Real Estate Investment Trust
37. PWM – Private Wealth Management
38. HNW – High Net Worth
39. D/E Ratio – Debt-to-Equity Ratio
40. LIBOR – London Interbank Offered Rate
41. S&P – Standard & Poor’s
42. IRS – Internal Revenue Service
43. FDIC – Federal Deposit Insurance Corporation
44. IPO – Initial Public Offering
45. SEC – Securities and Exchange Commission
46. FINRA – Financial Industry Regulatory Authority
47. IRS – Internal Revenue Service
48. FINCEN – Financial Crimes Enforcement Network
49. AML – Anti-Money Laundering
50. KYC – Know Your Customer

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1. Analyst: This is the entry-level position for investment banking. Analysts are responsible for conducting financial analysis, building financial models, preparing presentations, and assisting with due diligence. Investment banking interns are known as Summer Analysts.

2. Associate: Associates have a few years of experience and are responsible for managing the work of the analyst team, performing financial analysis, and assisting with deal execution.

3. Vice President (VP): VPs typically have several years of experience and are responsible for managing deal teams, building client relationships, and playing a key role in the execution of transactions.

4. Director / Executive Director: Directors or Executive Directors are senior-level professionals who are responsible for managing and overseeing multiple deal teams, leading business development efforts, and providing guidance to more junior team members.

5. Managing Director (MD): Managing Directors are typically the highest-ranking professionals in investment banking. They are responsible for managing the overall business of the investment banking division, including client relationships, deal execution, and strategic planning.

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The “Breadcrumb Trail” Technique

Go through your resume and find areas where you can incorporate specific numbers (dollars ($), percentages (%), etc.) to show how you made an impact. This could be in reference to a part-time job in high school, a past internship, a capstone college course, or a club you’re involved in or leading. People in finance like to see numbers so it’s important to show quantifiable metrics throughout your resume. Here are a few simple examples of what I’m talking about:

• Increased Finance Society attendance by 67% SoS (semester-over-semester)
• Decreased store expenses by $755 MoM (month-over-month)
• Achieved 113% quota attainment over a twelve-month period by diversifying lead sources
• Increased annual sales by 297% from $79k in 2016 to $314k in 2017

Don’t over do it, but make sure to have a few metrics mixed into your resume. The key is to integrate them into topics you want to talk about and elaborate on. Specific numbers (especially odd numbers) naturally attract attention. Some interviewers may be genuinely curious, while some will try to call you on your BS and have you explain how you got that specific number/metric. Being able to articulately explain each number in detail will blow your interviewer away!

These tips not only help you get noticed, but they can allow you to better control interviews. You can easily anticipate questions ahead of time and have thoughtful, robust answers on deck.

Check out the Resume + Cover Letter Bundle I created to take your internship/job search to the next level!

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