by the finance major | Feb 17, 2023 | Education
The Federal Reserve, also known as the Fed, is the central bank of the United States. It’s like a bank for banks, and its main purpose is to regulate the money supply and keep the economy stable. The Fed’s “dual mandate” is to pursue maximum employment (healthy unemployment rate) and stable prices (healthy inflation rate).
The Fed was created in 1913, in response to a series of financial panics that had occurred in the United States in the 1800s and early 1900s. The idea was to create a central bank that would have the power to control the supply of money and credit, which could help prevent financial panics and keep the economy running smoothly.
The Fed has several important responsibilities, including:
- Conducting monetary policy: The Fed controls the money supply by adjusting interest rates and buying and selling government securities.
- Regulating banks: The Fed supervises and regulates banks and other financial institutions to ensure they are operating safely and soundly.
- Providing financial services: The Fed provides a variety of financial services to banks and other financial institutions, including clearing checks and processing electronic payments.
- Maintaining financial stability: The Fed monitors the financial system for signs of instability and takes steps to prevent or mitigate crises.
The Fed is run by a Board of Governors, which is appointed by the President of the United States and confirmed by the Senate. The Fed also has 12 regional banks located throughout the country, which help carry out its policies and provide financial services to banks in their regions.
by the finance major | Feb 17, 2023 | Career, Education
Chartered Financial Analyst (CFA): The CFA program is a globally recognized certification for investment professionals. It covers a broad range of topics, including portfolio management, asset valuation, and financial analysis.
Certified Public Accountant (CPA): The CPA certification is a well-respected credential for accounting professionals. It covers topics such as financial accounting, auditing, and taxation.
Financial Risk Manager (FRM): The FRM program is a certification for professionals who work in risk management. It covers topics such as quantitative analysis, financial markets, and risk management strategies.
Certified Financial Planner (CFP): The CFP certification is for professionals who work in financial planning. It covers topics such as retirement planning, estate planning, and investment management.
Chartered Alternative Investment Analyst (CAIA): The CAIA program is a certification for professionals who work in alternative investments. It covers topics such as private equity, hedge funds, and real estate.
Series 7: This certification is required to become a registered representative and allows professionals to sell a wide range of securities.
Series 63: This certification is required to become a securities agent and allows professionals to solicit orders for any type of security in a particular state.
Check out the Resources page for exam prep!
by the finance major | Feb 17, 2023 | Education
Investment banking focuses on helping companies and governments raise money by issuing and selling securities. Securities are financial instruments like stocks, bonds, and options that can be bought and sold on financial markets.
Investment banks act as intermediaries between companies or governments that want to raise money and investors who want to buy securities. They provide advice to their clients on the best way to raise money and then help them sell their securities to investors.
Investment bankers also provide other services, like mergers and acquisitions advice, underwriting, and trading. Mergers and acquisitions (M&A) is when two companies combine or one company buys another company. Underwriting is when the investment bank guarantees a certain price for the securities being sold by the company or government. Trading is when the investment bank buys and sells securities for their own account, hoping to make a profit.
Investment banking is a competitive and demanding field that requires a strong background in finance, economics, and business. Investment bankers work long hours and are often involved in high-stakes deals that can have a major impact on the global economy.
In summary, investment banking is a type of banking that focuses on helping companies and governments raise money by issuing and selling securities. Investment bankers provide advice, underwriting, and trading services to their clients and are involved in high-stakes deals that can have a major impact on the global economy.
Check out other Front Office roles here.
by the finance major | Feb 17, 2023 | Education
The VIX, or the CBOE Volatility Index, is a way to measure how much people think the stock market will go up and down in the near future. Imagine you’re playing a video game and you’re not sure if the game is going to be easy or hard. You might feel nervous because you don’t know what to expect. The VIX is like that nervous feeling for people who buy and sell stocks.
The reason why the VIX matters is that it can give people an idea of how uncertain the market is right now. When the VIX is high, it means that people are worried about the future and the stock market might be more volatile, which means it could go up and down a lot in a short amount of time. When the VIX is low, it means people are more confident about the future and the market might not move as much.
Overall, the VIX is an important tool that helps people understand how much risk there is in the stock market, and it can be used to help make decisions about when to buy or sell stocks.
by the finance major | Feb 17, 2023 | Education
A “bull market” is a period of time when the stock market is rising and people are generally optimistic about the economy. This means that stock prices are generally going up, and people are willing to invest in stocks because they believe that they will continue to increase in value.
On the other hand, a “bear market” is a period of time when the stock market is falling and people are generally pessimistic about the economy. This means that stock prices are generally going down, and people may be hesitant to invest in stocks because they believe that they will continue to decrease in value.
These terms come from the way that bulls and bears attack their prey. A bull thrusts its horns up into the air, while a bear swipes its paws down toward the ground. So when the market is going up, it is said to be a “bull market,” and when the market is going down, it is said to be a “bear market.”
