Career Guide to Investment Banking[1]

8/7/2019 Career Guide to Investment Banking[1]

http://slidepdf.com/reader/full/career-guide-to-investment-banking1 1/166



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© 2005 Vault Inc.

INVESBANKICARE

AULCAREERGUIDEO

INESMENBANKING



Copyright © 2005 by Vault Inc. All rights reserved.

All information in this book is subject to change without notice. Vault makes no claims as to theaccuracy and reliability of the information contained within and disclaims all warranties. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without the express written permission of Vault Inc.

Vault, the Vault logo, and he ost rusted Name in Career Information are trademarks of Vault Inc.

For information about permission to reproduce selections from this book, contact Vault Inc., 150West 22nd Street, New York, NY 10011, (212) 366-4212.

Library of Congress CIP Data is available.

ISBN 1-58131-306-3

Printed in the United States of America



ACKNOWLEDGMENS

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CCwww.vault.com/finance

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INRODUCION 1

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APPENDIX

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INVESBANKICARE

THE INDUSTRY

Chapter 1: What is Investment Banking?

Chapter 2: Commercial Banking, Investment Bankingand Asset anagement

Chapter 3: he Equity arkets

Chapter 4: he Fixed Income arkets

Chapter 5: rends in the Investment Banking Industry

Chapter 6: Stock and Bond Offerings

Chapter 7: ergers and Aquisitions, Private Placements,

and Reorganizations



For more information go towww.vault.com/finance

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What is Investment Banking?

© 2005 Vault Inc.44

For more information on top investment banks and otherfinance employers, go to the Vault Finance Career Channel

Vault Guide to the Top 50 Banking Employers

/



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Fixed Income Research



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For more information on hedge fund, investment management,and other finance careers, go to the Finance Career Channel

Vault Career Guide to Hedge Funds

Vault Career Guide to Investment Management

Vault Career Guide to Venture Capital

Vault Guide to the Top Financial Services Employers

/




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The Equity Markets

For more information on valuation, bond pricing, and otherfinance interview concepts, go to the Finance Career Channel

Vault Guide to Finance Interviews

Vault Finance Interviews Practice Guide

Vault Guide to Advanced and Quantitative Finance Interviews

/



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Municipal bonds Bonds issued by local and state governments,

a.k.a. municipalities. unicipal bond income is

tax-free for the investor, which means investors in

munis earn interest payments without having to

pay federal taxes. Sometimes investors are

exempt from state and local taxes too.

Consequently, municipalities can pay lower interest rates on muni bonds than other bonds of

similar risk.

Treasury securities United States government-issued securities.Categorized as reasury bills (maturity of up to but not including two years), reasury notes(from two years to 10 years maturity), andreasury bonds (10 years to 30 years). As theyare government-guaranteed, reasuries areconsidered risk-free. In fact, U.S. reasurieshave no default risk, but do have interest rate risk if rates increase, then the price of USreasuries issued in the past will decrease.

Agency bonds Agencies represent all bonds issued by thefederal government and federal agencies, butexcluding those issued by the reasury (i.e.,bonds issued by other agencies of the federalgovernment). Examples of agencies that issuebonds include Federal National ortgageAssociation (FNA) and Guaranteed Nationalortgage Association (GNA).

Investment grade

corporate bonds

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kv12:T

II-BkCAPER 5


JB 37



© 2005 Vault Inc.3838

vcb bDcb w

w-w.

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Trends In I-Banking



CGIBk

Trends In I-Banking


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Trends In I-Banking


cbck.CNck

c b21 c

23.

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.



© 2005 Vault Inc.4444

vwcw

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bulge bracket)wwIPO.

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Stock and Bond Offerings



© 2005 Vault Inc.4646

CGIBk


AExF-O:

New and Old Shares

y y

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(cwwbvbcbckS&P Mw c

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For more information on valuation, bond pricing, and otherfinance interview concepts, go to the Finance Career Channel

Vault Guide to Finance Interviews

Vault Finance Interviews Practice Guide

Vault Guide to Advanced and Quantitative Finance Interviews

/



© 2005 Vault Inc.5050

-c ( c vw)

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M&A, Private Placements, and Reorgs




JB 51

Rq

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ByFLBO

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© 2005 Vault Inc.5252

Private Placements

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CGIBk





JB 53

I-bk

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b b w PPM cc c

cbc.

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© 2005 Vault Inc.5454

Bkvc cbc

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INVESBANKICARE

ON THE JOB

Chapter 8: Corporate Finance

Chapter 9: Institutional Sales and rading

Chapter 10: Research

Chapter 11: Syndicate: he Go-betweens



Dy/NJR

(NJb)

FJbB

yy

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Nq

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zyy

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Use the Internets most targeted

job search tools for finance

professionals.



© 2005 Vault Inc.5858

The Players

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CGIBk

Corporate Finance




JB 59

A

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w w . Uk wv c

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CGIBk

Corporate Finance



© 2005 Vault Inc.6060

c.Ovwvcc

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ccbccvb.

CGIBk

Corporate Finance




JB 61

The Role of the Players

c c -- b

w ? T c c b

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Corporate Finance




JB 63

Pitchbook preparation

A b bb w -

c-cccbkc.T

ckcbkv

cbc. P bc c

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CGIBk

Corporate Finance



© 2005 Vault Inc.6464

v-z w v

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Corporate Finance




JB 65

Due diligence

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CGIBk

Corporate Finance



© 2005 Vault Inc.6666

CGIBk

Corporate Finance

GPW y

y

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Mk

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.

CGIBk

Corporate Finance



© 2005 Vault Inc.6868

CGIBk

Corporate Finance

Pitching /

Beauty Contests

Selecting the

Managers in

the Deal

Amend the

Prospectus

Per Comments

from the SEC

Designing the

oadsho Slides

& Presentation

Managers Set Up

oadsho Meetingsoadsho Begins

Phase iring the Managers

Phase Mareting

GPbGPb




JB 69

CGIBk

Corporate Finance

Organizational

Meeting ith

All Parties

Due Diligence

Meeting at the

Printer and Filing

the Prospectus

Drafting the

Prospectus

oadsho Ends &

Stoc is Priced

Stoc Begins

Trading the

Next Day!

Phase Due Diligence & Drafting



© 2005 Vault Inc.7070

The end in sight pricing the deal

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bw$16$18).Tbw

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Corporate Finance



The Typical Week in Corporate Finance

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CGIBk

Corporate Finance


JB 71



© 2005 Vault Inc.7272

5..wcvw-

wcc.

Wednesday

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Sunday

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Corporate Finance




JB 73

CGIBk

Corporate Finance

C,I

WycomsYy

yyyy

y

I z

y

y ( Cy C

y )

C B C y y

z

EPy

:

(CyC)

P/EP/ECy

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EBIDy()

C omp any Sal es EBI TD ANet

Income EPSStock Price

A 28 5 2 $2. $75.

B 9 2 5 $.65 $18.

C 3 6 195 $1.15 $48.75

Company Shares(millions)

Market Value

Net Debt

EnterpriseValue

A 1 75 145 895

B 77 1385 6 1985

C 17 8266 19 8456

Company Ent Value/

RevenueEnt Value/

EBITDAPrice/

Earning

A 3 18 38

B 2 1 28

C 3 14 42

Last Months Data ($ in millions)

Valuation Measures

atios and Multiples



CGIBk

Corporate Finance


y y

yC

qK

y

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Bk(UBS)

8:00 a.m.: yy;y

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8:30 a.m.: y

yy

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CGIBk

Corporate Finance


JB 75

9:00 a.m.: / y y

GDM

yy

9:15 a.m.:

y/y

yy

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yyy

y

9:30 a.m.: P Y /

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y

yMy

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Py

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P ("PIB")

y y

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y / yy

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yyy

12:45 .m.: y

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y

1:45:Ryy

yEy




JB 77

CGIBk

Corporate Finance

6:35 .m.: W ( :

/

y y

//

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XyMy

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yBy

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y)

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10:00 .m.: y

yyy

y Y

11:00 .m.: Dy

I

2:00 a.m.: Y y ( y

y

)yy

C




JB 79

PMD(kBk)

A bc bk b b

ccb.T

ccbcw

c. U P MD w c vc c. P

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CGIBk

Corporate Finance

1:30 .m.: C GMD CE

3:00 .m.: P

6:30 .m.: My

7:00 .m.:

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12:00 a.m.: C("Wy

I

1 I

y :08:00 y

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ydugdbu

hy'kdugubpxp

yuhp'pwhpphy w f g d bxu bh h'

ygdg

-Gdhd



© 2005 Vault Inc.8080

P v.TcwkPMDkq

c.

Monday

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M&A ck.H

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b M&A c

CEO vcc. Aw bkb

wcCFOw9..

Tuesday

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c-b

c c v

.Abkcc

vccv.

Wednesday

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cbkk

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bIPOc.F

bw bk b .

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CGIBk

Corporate Finance




JB 81

Thursday

Tbkbckcvw

kcbvcck

c T. I cb

cc c( w w-) w wk

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w

w.

Friday

T bk w k w v

. A wcbk bk w

wcbccv

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Weekend

Ovwkbkcw

v b c c

ccbckc.

CGIBk

Corporate Finance



CGIBk

Corporate Finance


Formulas For Success

T cc bk b

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cvcccc

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SB.I

cqckwbwwwwk

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vv c c



CGIBk

Corporate Finance


JB 83

w.Scbbcz

wcw.

Ovcvk

c c. S c

cccw

c - c . Lk c v

bccv

bk. Tc vcc

b . Sv I-bk v

vqvcwc

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P

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MD

SccMDcwkwb

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cczc

w cc . Pbc k k

wcbcbc

bbk.IwvMDbb

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cMDc-1-ck.



I

Bk/C

FIP

y

q:

M&q

Py

!

S&

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y

q:

C

M

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q

Py&

!

y

yy

Y45

0

yy

15q&

y

LF

IP

Dy?

UI?

For more information go towww.vault.com/finance



© 2005 Vault Inc.8686

S&:Ayb?

I.T

bc

v

wkc.

qcbck.

Svcv

c . Twv b w

bwvw.U

w k w k

wccc.

T k b b w ( c

cspread).Tbckbc

c.A cwbb-

ccbccc

.Hjcbk.I

c b. I b

bwcb.

Twvcv.T

k w

wc.Twbb

cbcc

c.Tc

wc.

CGIBk

Institutional Sales and Trading (S&T)

pu ud ( f d bw

py)

SALESPERSON: Cyy

:buyhghpwghgh

RADER: I

Y

SALESPERSON: D$10



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.T

cbwcbcq

w . T qck c

v . T bb kw

bwvb wz

b.

Trading The Basics

W

yqy

y yy


JB 87

CGIBk


Lqy

qyy

Wy

yq

qyy

ommon stockqy

( y

) Uy

yqy

Det D y

yy qy y

qy y

Iy

qy y y

qy qy



© 2005 Vault Inc.9292

vbccU.S.v.U.K.Ackcc

vvvvccc.)

CGIBk


ACk

Yy

y z

yq

y y W E z

yy :

Bloomerg machine: Byy

(yy

BMB

)yyy

y qy qy

I qy

yyy

M

B

Phone monitor: y

B

My

G

Small roker screens:

Large Sun monitor: yy

P

U y qy



Executing a Trade

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c c? Nw w kw bc

bwwcvccwckbc

.wbwwcsmall lots trading

vc.

S

Sccc

wcwc

.

FNYSE-ckcbwvc

wccbc

Nw Yk Sck Ec. H c

cc.

F Nq- ck c c w

vcwbkwbk

ckcvc(ckbkc

w).AckcOv--

C(OTC)Mk ckw

v c w b j k w

wwcv.Awvwccc wwc

ccbjkwwvc

wcwbwc.(Awk

cbwbcb-k

.) I OTC c c c

ccc.

Fbccc.B cv

bvcv$1v1b

c.HwvcNq

ck.Tcvcb

wNYSE-.


JB 93

CGIBk




© 2005 Vault Inc.9494

TwcbNq

NYSEckc.A bcwk

Nq.

HkckcNq-

ck.

Nq

ORDER: You call in an order of 1,000 shares of icrosoft stock to

your retail broker. For small orders, you agree on a trade placed at

the market. hat is, you say you are willing to pay the ask price as

it is currently trading in the market.

EXECUION: First, the retail broker calls the appropriate trader to

handle the transaction. he Nasdaq trader, called a market maker,

carries an inventory of certain stocks available for purchase.

RANSACION: he market maker checks his inventory of stock.

If he carries the security, he simply makes the trade, selling the

1,000 shares of icrosoft from his account (the market makers

account) to you. If he does not already own the stock, then he willbuy 1,000 shares directly from another market maker and then sell

them immediately to you at a slightly higher price than he paid for

them.

CGIBk




© 2005 Vault Inc.9696

CGIBk


NYkSkEx

N Y E (NYE)

y2800

z$182004

NYEBBW

(

) y

NYE

y

(yy)

E

qy()

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90

NNYEy

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Nq

y y z

yyCy

NYEy

NYE M

y NYE ( y

)yy

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yy

NYE




JB 97

Bk

Scbk(c retail trades)q

w c. I c c

cww

wwwkk.

Hwv w vk b

ck ck bck ck z vv

c. A b 2 IBMck

cwbccwbck.A

vcckvbb

qwvck(c

k).

FNYSEckcblock trading

b . T c v

ccccwbck

bkw-v

c.Tbckc

w.Sbckkbck

vvwk.

At the market SFwb2 IBM

cc bck v bk. I

FbvIBMckwvwc

ccck.Ic

wcbk(cc

bkck)bvb2

IBM.Tckvckbkw

k c IBM ck. A

c c c c IBMb.

Ocbkccckk

ckbckc

bck.Tcwv

ccv.

Working the order AFbvIBMw

bcckwk

bcwck.Twcbkc

wkwcb.I

cbkIBMwc

CGIBk




© 2005 Vault Inc.10010 0

k.Hwbkc

I-bkcS.

Ey-

egional Frameworks Traditional Programs

Clerks Tbck

bcbkckkcb

c . A

v ck

v v k.

Hwvckkkcc

cb.Abcb-jb:ckwwMBAv

-cv

jb.

Trading assistants Tcbc

v vv

ck.Tvbc

bcbkbcvvwc.

Bckcc

NYSE c k w cccc

bbcc

w w bz wk. D vwv

-jb.

Note Clerks and trading assistants at some firms are hired with the possibilit

of upward advancement, although promoting non-BAs to full-time trading

jobs is becoming more and more uncommon, even at regional firms.

Wall Street Analyst and Associate Programs

Analysts S cc

S c w

bcbv.Qvk

cwbk b. T b cc b

cc.Tb

cccwc

bbc.Aw--v

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JB 10 1

bcc

v c c c c.

(Scc.)

Associates Tcccbc

bck.R

cwbc

wMBAvkc.

NwMBAbb$8w$15-bj

Sbk.Sc-ccckc

c-ccc.Acv

-bwbc

vqckw(v)

k.

F-

Block traders Tkkwz

c

bkwckc-.Tc

cv k c v c ck

cccb.SMBA c

cbwkc-.

Sales-traders A bbw-

bbck.bck w vv ck

b - c w -bw

bckw bck c. D

bck-ccc

cvvkc.T-

kbkcccbk

kwvc

wccc.Sbv

cccw-c

cvbc.ccq

-wcc.

Structured product traders A b S

ccwvv.k..cc.

(Derivatives ccvvv

CGIBk




© 2005 Vault Inc.10210 2

CGIBk


v c v k ck b

cckv.)Bcc

vvcqbcc

vbckww

vw--.Nwv

cck(c)vTc

kqc.Tcc

zv.Lw-vcvvc

w c c c

vvqccwk.

Note that in Trading, job titles can range from Associate to V to anaging

Director. But, the roles as a trader change little. The difference is that Ds

tpicall manage the desks, spending their time dealing with desk issues,risk management issues, personnel issues, etc.

C:BP

I y y

y y

y

yyP&

yI

yyIyyy

Ey yy

MD

Iy(

yyI)

$1y



© 2005 Vault Inc.10610 6

CGIBk


10:0 yy

(IyqIy

)

11:00 C(I

;

)

12:00 Y y

q (I y

I

y)

12:0 (Y y y 10 y

yW

)

1:00 W y ( I

200000y

yy

yy)

2:00 (Yy

yyy)

2:05 Yy

yyy(I

y I y

y

)

4:0 (I4:0

5:00I)

:00 M y y (W

y

My

)



© 2005 Vault Inc.10810 8

Institutional Sales The Basics

Scvbkcvj

cc b

v bk v. Tcv

vbk.Nwvc

GScv cI-bk

v v b wk. G

wv c v bkvc

vcvcPvCSvc(PCS).

RBk

S c cc cv c c

v cc. R c

cc retail broker. T bk jb

vvccvv

cv.Bkccck

vvccckbw

b . T b bkv

k. PS 7

S63 q b cc.

Bwkwv

bk.

IS

Bc bk w MBA k vv

institutional salesperson bk w

c .

I c c c

c.Abk

c bc c éé

(vvc).

PCS(PCS)

A c bw bkPCS cvvcwv.

A c w$3 $5

vccbkwPCSv.

S PCS MBA w

CGIBk





JB 10 9

c c. Bc PCS v

bc- w

v jb q cc bk.

A bc PCS c v

cbcbc

PCS.

CGIBk




IIPO

Ccvbkwc

wkIPOk.S

wvcwv.T

vbkwIPOcccbc7

cc.T7c

vbwcvbk(..c

c)w:

6cS

2cCFc

2cSc

© 2005 Vault Inc.11211 2

CGIBk


IyXYZ

(PM)y

PM

PMy

yyyXYZ

PMy

PM

yy

PM




JB 11 3

(I c c

cc v c bw

ccc.)

Aw c bkw

IPO.Tvvbwv

wkww.A

b b c k c

ccc.I

(c -- w v) bw

portfolio manager c

. D w

w bw c

b-PM. cPM cvc

b.

Tb. M v 7..

v . Ec ck

cvck

b . T 7:3

vvccwvc

. T b2 w

b b

c.

A8..ck.C

cbcwkvvw

b b. A k c b

c k

. S c vv b w

vvkckc.A9:3k

bcccczk

ck.

Lc cc

k.Tvvccb-wv

bc.

CGIBk




© 2005 Vault Inc.11411 4

CGIBk


DyLSA(BS)

kdyhffhxd

dNwYk

6:45 G (I y 6:45

:00)

6:50

WJ (Iy

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)

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y

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(W

y

q)

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10:00 y

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yyIyy)

10:15 By

12:0 R y

(Wy

Wy IyPzz

PCIy

y)

1:00 By(II0

II)

2:00 y(I

yyMyy10I




JB 11 5

CGIBk


Tjkcb4:..

B4:1vb

c wk. S b-cvwbcc.

S

Ewcbw

c k . U -

cc cc.A

cwPM

b-bk

cc.Pbqck

w v . T c

cc.

S cqckw cc

k--wc.OcbI-bkw

bckwcc

wbvcc.

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---k)wcc

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v.Ikw

wwccv.F

wwcckwcv c w c .

T c v

c.

Y yy )

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5:0 (

yy

yy)

:0 y

(y)



© 2005 Vault Inc.11811 8

CGIBk


c.A cb1c . T bv

cvcbvPCS

wk.Tv-b

k w cv

cccjkc.O

wvccj

.MSPCSwkcb.

OcPCScvb.TPCS

c b w v k b wvv.cb

kwcb PCSbb

cbckqbvw

vv c. T bv PCS w

wkc.

OccwPCScwkw

wcPCSbwwcPCS

.(TczS.)Tcc

wcvb.Oc

w w c wk

cwc.

G k PCS v w b bk

bbvb.PCS

cbccS

($8 $25b ) qck

cb.




JB 11 9

Pyby

A cc c b b k

.TbbPCScwv$1

.Tb---bPCSwvk

$2.Tvbw$5

PCSwkS.Ikv

vcvwv.Sc.

OGScPCSvwc$3.4cvb

c.

CGIBk


BBk

PCy

yyyPC

y

PC

yP

yy

:

R ( ) My

I CE

yCE

C

N

y PC

yy

y



© 2005 Vault Inc.12212 2

The Players and The Product

y

esearch assistants

T b-v b cc c c

b w k . T c

c w c b

c k c

/ . Rc k v

cqb.Tv

b c k

c c w

cc.

esearch associates

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kcbwccc.L

wkcb-cc

c. Hwv c c

ccccwkwk

bwkwk.U

cqbcc7:3..w

kc.

M c c c c

ccbbvkc

vcMBAcc

c-vcMBA b.

A ccc c w b.

FcccB

cc(.. ) c

.(Twbb-

bc.)cw

v c w. A c

c c c wk -

c . T c c c v

c b wk

cw-vc.

CGIBk

Research




JB 12 3

T c /c c

ccc.A

wcvcc

ccwc

cb.FMBA ccc

I-bkc:w$8w$3

b$3-bc.

esearch analysts

Tccq.Aw

c c ck b cvc

b-wcv

CXYZ.T bc vw

cc/c.

F-ccb.Tkq

cc c : 1)

c ck ck 2) k q cvc

vkwckccb.AckwbcII -(

bInstitutional Investor ).

CGIBk

Research

IADAy

I y

yGy(

) y y

ByyI

y y y

y y y

y

N y

I y

MBI

yy




JB 12 5

CGIBk

Research

However, the tasks of a research analst tend to remain somewhat

consistent once the analst level is reached, with perhaps more selling of

research and traveling involved at the most senior levels, and more

oversight of a group of more junior analsts.

Industry research reports

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wc. F c

ccccc

kcvc.

Tqc

c w w

II(II)

Ratings Scorecard

I I y z

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y

My

y

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y W y y

y N

y

II y y

y

y y

M y y

I200BII50

yMyN52002

N22006yMN

N22002CN1

N4




JB 12 9

Three Months in Research

y

Mcccv

c wk c. O q wk

ccc. Ev vv wc c

qearnings season.Tc

ckcbcqw

cjbcz.

Ocwkwc.A

cb cv

wwkbb

cc q. w

cv c b c bbv

c. F w k k - q

c.

wwckc

cwk

wb.

M

OMc1 wk q(Mc31)

b k c c

cv. H w b ck

bwcwbwwk

q.I EPSbc

EPSwcww

vv.

Tbcc

cv c c

cw c .

Dk c c wc

CFOvcv

vccbEPS.Cvccbccc.

CGIBk

Research



A

Tq Ac

q . D c c c

c c v

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A)cccc

bcv.

Occ b (wc -)

cb qck -

.Tcc

ccwwbc

wv.

w wk w c

b-cww

wvwq.

My

IMw

b.vv

c

bck wk-jc.Tc

c - jc. Bk w

c c b c c

c wk w v bk v v w v

ck.

© 2005 Vault Inc.13013 0

CGIBk

Research

W

W y

y

yyyy

yy

yy

y yyy



Ybkcc

qv.U

- ( c) wk

q v c w ( b-

c) c ccc

w.Hwvcwvb

cccw.

Tcccc

c.Oc

wccvbkc c v -- w

v v. T

c c NwYk w c wb

cc.


JB 13 1

CGIBk

Research

yy

y

y z

y

y

y

yq

B y

y

Kyy

yy

(y)

yy

y z y




JB 13 3

Fxy?

T q bk q v

q c c c

bvbk.?Ukck

cvc.Ic

U.S. T b c c w

w/c

c.Mk.q

c(..II k)

ccq.Ac

cjb S.

Ayxy

Hwbq?Av

v c c

q.Bcb

vw.Icbck

c-bckcv/Tc

vcw.Bc

vw(ccc)c

k b. F U.S.Tc

cCPIPPIqGDP b.I

w w c b c wk

.

T b bc j

q.Mkc7:3ET

wwk.OC

b4:3.

T c c wk q c

.Twb-

cwckbc

kvc.Hb

qw12-13-bw

.

CGIBk

Research



© 2005 Vault Inc.13 4

Formulas for Success

R/

Tcccwk

qck bc wzz Mc Ec . Ec

cc wk

-cwc

c. E b k c

cck c

.

Rc b w b

cc.L

c c w b

wq v b

c- c cv w k

c q c

cc.

Ukccc/cc

vw MBA. S

c-w

cw cc w-

ccw-.T

b MBA - c kc.

Sbkj

c. ? S cvjb

.Mcvbc

b-I-bk.O

bc c . E

ccMSA -v.I

w bcv w

v . Bw

b bI-bkb.

Awbcwwc.

Ry

Nw c c

wk . B w

CGIBk

Research



b bc bc - cv

w ck w b-.

cc

bwvc.Tcc

ccbkb

.Scbwccw

k bc. S c

T w w v . T

cvbk

kqwbb.

T.IkSFcc49;

bb.

Dw c v w bb.wc

bwbIPOc

cbkwwkcbc.

cckcb

cwvwv

bk. T b c cb k

c bjcv c cb w

w-kv.


JB 13 5

CGIBk

Research

DRAyNMBA

CFA?

qMBy

y

MBP

MB hartered Financial Analst

C I M R

(IMR)

y

IIIIIIyMy

Cy

( y )



© 2005 Vault Inc.13 6

CGIBk

Research

y IMR

10y:

I:4862

II:4665

III:5982

C y y

q

y q

yCMB

I yC

For more information on investment research careers, go to the

Vault Finance Career Channel

Vault Career Guide to Investment Management

Vault Career Guide to Hedge Funds Vault Career Guide to Venture Capital

/




JB 13 7

cvbk?Sc

b c

c c. N b c

cc.

c v v c ck b

wb-c

bcvc

cbkwk.

Syb

Ibccvvcc

w SEC. A c c b cc

vbk bw .Bw

c w c c w

cbwww

cc.

Managers

TIPOvvb.TI-

bkvwc. M b c

wcccvc

kw.IIPO7.

cwcc

cw.Fw-c

5.cc-zc.

Acvcvbww

v.Tcc

w w b

w.C?K.

Sy:

G-bCAPER 11



© 2005 Vault Inc.13 8

Underwriters

T underwriters c bc

bvck

.TcI-bkwk;

w cc b

ww.

Uw c b cjc w

c. T c c c. I

ccwcUwwc

w.Aw13vbk

ckwc.

Iwccc

b.wcqwv

bk cbk z

bk.Nvww

c v. T

cbcb c

c.Tkcbw

vwvv(..b

).Twcc

b 5 7 c w

wcc.

CGIBk

Syndicate: The Go-betweens



© 2005 Vault Inc.14 0

CGIBk


vccww

w c ? Bc w c

cb.

Sc:

Mkbkcw

PwI-bk

Acckvb-c

Dcv

y25

5000000 25 20000000

)

I

20 $28

q y

y y

y Wy Ny

y y

qy

$18

$28U

$18 E

UP $10

5

(000000y20000000=5)

20

(4000000 y 20000000)

y14(294118

y 20000000) $50000

$200000 y $1406 N

y



© 2005 Vault Inc.14 2

S1ccc

wk23c.T

ckw

cczw.

Icbccwv

cbbwvcb-.

Scvbcv.

A bk c c c

.Tpricing call c cc

wbckbk.

Pcc c w

cbc.RbIPO

ccwwc

b.I()

v c b c. Hw c

cbccb?CEOk.

Ackbvc c

bckwc.Hwv

cccCEOccv

.Tcc

wkw.Mwbwk

(cbv).Ab

vbvbcc5c

cc b. I k c b 2

5cw$1c

c(w).

P

Bc v c c

bbcc.B

jcbwc.D

cwcw

b-.Scc

c cc cc.Sccccbw

b- ( c

w1cc.).A

cc c cz w v

CGIBk





JB 14 3

bkwb(wc

).

Ibk,ky

A c v k kck

b-cc k kw . O

vvbvcvvck.

Sccwbv

c(cw).

Acqcc.Jk

ccb.

Wky?

AcvMBA.S

wk w w c c

c.Tccbc

wv vc c c w

c(c)c

ckbv.Tbc

vcckb

ckc. OcccMD w

ccck.A

c v

w ck vv w

wkc.

Bcbkc

wwkwwv

I-bk . Bcc q w

bkwjbb.R

ccccjb

ww.

CGIBk




W

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INVESBANKICARE

APPENDIX



CGIBk

Appendix

Glossary

Annual report: A cb c

c c v

v;qcbcU.S.

Asset management: A kw v . M

v v bk k

vbvvv

.Fwv(vc)vbkw

vcccc;w-w

bk w . A c

bkcc.

(Tccwc

v.)

Audit: A c c

cccwcc.

Auditor: A w b

c cb

.

Bond spreads: Tcbwcb

U.S.Tc.

Bulge bracket: T S

(cGScMSMLcSS

BCSFB).

Buy-side: Tc vbk()

w b ck b c b bk. (T

vbkcvkw-

.)

Certified public accountant (CPA): IUS

cbcqc

bw.

Chartered Financial Analyst (CFA): A v

wc-ccvkwc.


JB 14 7



CGIBk

Appendix

© 2005 Vault Inc.14 8

Commercial bank: A bk . F

cw$3wc

ccccbk.

Commercial paper: S-cbc

.

Commitment letter: A c

ccbkvc.

Commodities: A ( c c )

cbwc

c.Fcwbbc

ckww.

Common stock: Accqcck

w c. (A ck

bw.)Tvjckkc

c ck b v v c . A

vww51ccc

ccc/wb

c.

Comparable company analysis (Comps): T

cc.Cccv

c.C

vvc b wkv

c.

Consumer Price Index (CPI): TCPIcc

bk vc. T CPI

c.

Convertible bonds: Bcbcvcb

ck.

Derivatives: A w v v c

.Ecc-

w.

Discount rate: A ww-bF

Rvck b

U.S.cwqckqck.Mcc

cwcbkc



CGIBk

Appendix

v.TccbcvbF

bbc.

Dividend: A bcck

wb.

Equity: I ck. Eq w c

bck.

EISA: ERIcScAc1974.T

wq.

The Fed: T F Rv wc ( )

ccb.

Federal funds rate: T c bk c v F Rv q. T ck

vccb.

Financial Accounting Standards Board (FASB): A v-cb

cc cc c U

S.

Financial accounting: Tccvc

kcckbkvc.

Fixed income: Bc.

B c b v c

c.

Generally Accepted Accounting Principles (GAAP): Tbcc

cc cc c

cv c k cc cc

cc.

Glass-Steagall Act: P1933G

Dvbkb

F.D.I.C.wv.TG-SAc

Ac v-bk ( c)

ccbk().FJ.P.Mwc

c MS. Tc w

wk 199. I1999 G-S wcvbG-Lc-BAc.


JB 14 9



CGIBk

Appendix

© 2005 Vault Inc.15 0

Graham-Leach-Bliley Act: A kw Fc Svc

MzAc1999.Ec

G-S Ac b c

ccvc.Awccbk

v bk c c

cc.

Growth stock: I v bv w

ccc.Tcvbv

vvwckc-

-c--bk.Tccc

c c McCc

wck.

Hedge: Tbckck.H

wkkc:w

vk.

Hedge fund: Av

wv. Ic vvc

w k k w

v.

High-grade corporate bond: A cbwbvBB.

Acvb.

High-yield debt (aka Junk bonds): C b

( c v k ). C

c c S & P c (

c)bbk.JkbbwBB.

Initial public offering (IPO): TvIPO

kcckbc.Gbc

c:Bk

bc c w w q SEC

qvb

w.

Institutional clients or investors: Lvc

c(vvv).



CGIBk

Appendix

© 2005 Vault Inc.15 2

Mortgage-backed bonds: B cz b .

I c b v w

k.Tv

bckbk.

Municipal bonds (Munis): Bbcv

.k.. c. Mc b c -

v wc v w

v.Sv

c.Cqccw

bbk.

Mutual fund: A v vc cc v

(b v ) v v c

c ck b. M k b c

c.

P/E ratio: Tc-- . T c

ck c --. TP/E

v ck ( v bv c w

w).Sck-wvP/E.

Passive investor: Rvccc

ck k (.. S&P 5 I 45

CI).Bcvvvc

c.

Pit traders: T w ck

cc(v

bkc).

Pitchbook: T bk b c

b bk cv c w

.

Prime rate: T b U.S. bk c b

c.

Private accountants Acc wwk b w

vc-z.

Producer Price Index: T PPI c c

bk vc. PPI

cc.



CGIBk

Appendix

Proprietary trading: T w (

c).

Prospectus: A bc(wvb

SEC)wcv.Dbcv

v c c c c

bckc.

Public accountants Accwvcbc

bcwkc.

equest for proposal (FP): S b (..

c)wk

w v . T c

qc.

etail clients: Ivv(c).

eturn on equity: Tvq.

R q ROE c ww

v bk bc w c

bc.

oadshow: T v c

IPO v wk c .

Hw wk:Tcvbkwv

j c c. I c c c

cvk wq.

S-1: A cwSECvc

bc.TS-1c c

v.TSECvS-1bckcb

v.

S-2: A cw SEC bc c

kk.TS-2c

cv.TSECvS-

2bck.

Sales memo: S w b c cbk

bbk.Tv

wzwwkckb

w.


JB 15 3



CGIBk

Appendix

© 2005 Vault Inc.15 4

Securities and Exchange Commission (SEC): A ck

G-SAcwbckkc

1929 . T SEC c

cckc.Pbc

cbvbSEC.

Short-term debt: A b.Ac

cc.

Specialty firm: Avc

cc.

Syndicate: A v bk w w

cckb.Uww

bk w b c w cw.

T-Bill Yields: Tvwcv

v9-12vb.

Tax-exempt bonds: Mcb(kw).M

c.

10K: Ab bccw SEC.

Iccckcc.

10Q: S1Kbq.

Treasury securities: ScbU.S.v.TvT B( w)TN

(w1)TB(13

).Avc

k-.IcwU.S.Tvkv

k; c c U.S. T w

c.

Underwrite: Tcbvbkw

ccv.Tccvbk

bccc

vck.

Value stock: -bvcwwccbk.E

cvv.



CGIBk

Appendix


JB 15 5

Cc v ck c c k EMb bk

cBkAcJ.P.MC.

Yield: Tv.A b



CGIBk

Appendix


JB 15 7

SP

American Banker Fortune

Business Week Institutional Investor

The Deal Investment DealersDigest

The Economist Investors Business Dail

Forbes The Wall Street Journal



Dy/NJR

(NJb)

FJbB

yy

y

Nq

MRDb:y

zyy

Wy

yy

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professionals.

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