Fundamentals Flashcards
7 cards from real Investment practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fundamentals flashcards as text
What does the term 'buy-side' typically refer to in the investment industry?
Answer: Firms that manage money and purchase securities, like asset managers and hedge funds
The buy-side consists of institutions like asset managers, pension funds, and hedge funds that invest capital by buying securities.
Which entry-level role is most associated with building financial models and pitch books at an investment bank?
Answer: Analyst
Investment banking analysts are the junior staff who build models and prepare pitch books.
What is the primary purpose of diversification in a portfolio?
Answer: To reduce unsystematic risk by spreading investments
Diversification lowers company-specific (unsystematic) risk by holding a mix of uncorrelated assets.
Which regulatory body oversees securities markets in the United States?
Answer: The SEC
The Securities and Exchange Commission (SEC) regulates U.S. securities markets and protects investors.
What does 'liquidity' describe about an asset?
Answer: How quickly it can be converted to cash without major price loss
Liquidity measures how easily an asset can be sold for cash near its market value.
Which professional designation is widely regarded as a standard for investment analysis careers?
Answer: CFA (Chartered Financial Analyst)
The CFA charter is a globally recognized credential for investment management and analysis roles.
What is the 'sell-side' in finance?
Answer: Firms that create, promote, and sell securities, like brokerages and investment banks
The sell-side includes investment banks and brokerages that issue, market, and sell financial products.