Wall Street Prep Investment Banking Quiz 1
Questions and Expert Approved Answers
after financial crisis they became banks so they are subject to regulatory authority -
B
ANSWER investment bank
LU
what is universal bank/examples of universal bank - ANSWER a Universal Bank
offers commercial banking and investment banking
YC
JP Morgan, Citi
Investment Banking Division IBD , also named "corporate finance or advisory" Provides
D
what 2 services - ANSWER capital raise (raising money through debt or equity
TU
markets)
advisory (M&A, LBO, restructuring)
ES
Roles of Investment bank other than Capital Raise and Advisory - ANSWER Sales
and Trading
C
Research
Asset Management
A
Proprietary trading (ended by Dodd Frank Volckler Rule)
Private Banking
Sales and Trading provides ___________ to the marketplace - ANSWER liquidity
,Sales and Trading often referred to as "market making" because they provide liquidity to
the marketplace. Sales and Trading earns revenues via ____________ and to a lesser
extent_____________ - ANSWER S&T earns revenue via trading commission and to
a lesser extent trading profits
Focus of S&T business - ANSWER structuring complex financial products
(derivatives) which trade OTC "over the counter" directly between two parties not via an
B
exchange ex: interest rate swaps, CDS
LU
S&T postions organized by __________. - ANSWER desk
ANSWER YC
______________is LARGEST front office division in terms of revenue and headcount -
S&T
D
Research serves both internal and external clients. Internal clients are who? External
clients are who? - ANSWER Internal Research Clients are S&T.
TU
External Research Clients are institutional client such as hedge fund, pension fund, asset
manager
ES
______________ is no longer tied to the Investment banking function after the dot com
bust of the early 2000s. Regulators attempted to end conflicts of interest by putting a
C
"chineese wall" between research and investment bankers. - ANSWER Research
A
Prop Trading is trading with __________________ capital - ANSWER one's own
This acts as an internal hedge fund as bank tradings with one's own capital; prop trading
was put to an end via ________________. Although, it is hard for regulators to know if
, trades were made on behalf of the client or not - ANSWER Dodd-Frank "Volcker
Rule"
3 Investment Bank Clients - ANSWER Corporate, Government, HNW
Front office - ANSWER touch the client; I banking group, S&T, Asset Management
B
Middle office - ANSWER risk management, treasury management
LU
back office - ANSWER Operations and IT
YC
2018 milestone year when all asset classes except for cash posted ______ returns. This
was the first time we sat a result in the history of the Callan Periodic Table stretching
back to 1979. - ANSWER negative
D
2019 was one of the ___________ years for asset classes across the board. This was
TU
fueled by given the expectations of the fed to raise interest rates at the start of 2019, US
Fixed Income raised ________, the best result since 2002. - ANSWER strongest
ES
8.7%
2019 fixed income results were surprising because _________ - ANSWER losses
C
were predicted; but in reality fixed income rose 8.7%
A
4th quarter 2018 results - ANSWER decline in the equity markets worldwide; losses
in fixed income following the 9th rate hike since 2017 began tightening
Questions and Expert Approved Answers
after financial crisis they became banks so they are subject to regulatory authority -
B
ANSWER investment bank
LU
what is universal bank/examples of universal bank - ANSWER a Universal Bank
offers commercial banking and investment banking
YC
JP Morgan, Citi
Investment Banking Division IBD , also named "corporate finance or advisory" Provides
D
what 2 services - ANSWER capital raise (raising money through debt or equity
TU
markets)
advisory (M&A, LBO, restructuring)
ES
Roles of Investment bank other than Capital Raise and Advisory - ANSWER Sales
and Trading
C
Research
Asset Management
A
Proprietary trading (ended by Dodd Frank Volckler Rule)
Private Banking
Sales and Trading provides ___________ to the marketplace - ANSWER liquidity
,Sales and Trading often referred to as "market making" because they provide liquidity to
the marketplace. Sales and Trading earns revenues via ____________ and to a lesser
extent_____________ - ANSWER S&T earns revenue via trading commission and to
a lesser extent trading profits
Focus of S&T business - ANSWER structuring complex financial products
(derivatives) which trade OTC "over the counter" directly between two parties not via an
B
exchange ex: interest rate swaps, CDS
LU
S&T postions organized by __________. - ANSWER desk
ANSWER YC
______________is LARGEST front office division in terms of revenue and headcount -
S&T
D
Research serves both internal and external clients. Internal clients are who? External
clients are who? - ANSWER Internal Research Clients are S&T.
TU
External Research Clients are institutional client such as hedge fund, pension fund, asset
manager
ES
______________ is no longer tied to the Investment banking function after the dot com
bust of the early 2000s. Regulators attempted to end conflicts of interest by putting a
C
"chineese wall" between research and investment bankers. - ANSWER Research
A
Prop Trading is trading with __________________ capital - ANSWER one's own
This acts as an internal hedge fund as bank tradings with one's own capital; prop trading
was put to an end via ________________. Although, it is hard for regulators to know if
, trades were made on behalf of the client or not - ANSWER Dodd-Frank "Volcker
Rule"
3 Investment Bank Clients - ANSWER Corporate, Government, HNW
Front office - ANSWER touch the client; I banking group, S&T, Asset Management
B
Middle office - ANSWER risk management, treasury management
LU
back office - ANSWER Operations and IT
YC
2018 milestone year when all asset classes except for cash posted ______ returns. This
was the first time we sat a result in the history of the Callan Periodic Table stretching
back to 1979. - ANSWER negative
D
2019 was one of the ___________ years for asset classes across the board. This was
TU
fueled by given the expectations of the fed to raise interest rates at the start of 2019, US
Fixed Income raised ________, the best result since 2002. - ANSWER strongest
ES
8.7%
2019 fixed income results were surprising because _________ - ANSWER losses
C
were predicted; but in reality fixed income rose 8.7%
A
4th quarter 2018 results - ANSWER decline in the equity markets worldwide; losses
in fixed income following the 9th rate hike since 2017 began tightening
