general Finance jargan

liability

what is owed

ETFs

exchange-traded funds
It is a single investment fund that holds a large group of assets—like stocks, bonds, or commodities. You can buy and sell shares of an ETF on a stock market just like you buy a regular company stock

How ETFs Work

• Basket of assets: One share gives you a small piece of many different investments at the same time.

• Trade like stock: Prices go up and down all day long while the market is open.

• Track an index: Most ETFs copy a market index like the S&P 500. [1, 2, 3]

residual claim

is the right to access what is left of a company's income or assets after all fixed and prior obligations—such as wages, taxes, supplier bills, and debt interest—are fully paid

OTC

over the counter trade as opposed to trading through a stock exchange

physical delivery of bond

basis points

one basis point = 1%

SPV

special purpose vehices

subsidiary of a company

with a separate asset/liability structure and legal status that may

ring-fence its obligations thereby

protecting them even when the owner/parent company goes bankrupt

debt securities

An umbrella term for any financial instrument representing borrowed money (e.g., corporate bonds, government bonds, or treasury bills).

CDOs

A complex financial product that pools together individual loans or debts (like mortgages, auto loans, or corporate debt) and sells shares of that pool to investors.

To sell claims on assets means to give the buyer the legal right to collect repayment for the specific pool of assets

zero-coupon bonds

bond that pays no periodic interest payments (coupons). Instead, it is bought at a discount (e.g., $\$85$) and pays its full face value (e.g., $\$100$) at maturity.

Covered Entity

Equity

the value of an ownership stake in an asset or bizz after substracting all debts and liabilities

ownership value - what remains for shareholders if all debts are paid off and assets are sold (which means assets - liabilities

so in the stock market, buying equities means purchasing shares that grant partial ownership in a corporation

Leveraged Buyout

leveraged buyout (LBO) is the acquisition of a company using a large amount of borrowed money to fund the purchase price. [1]
‘Leveraged’ bcs uses debt

holding company

YTM

total estimated return if a bond is held until it reaches its maturity date

NPV

Net present value (NPV) is the current value (meaning discounted to the PV) of all future cash flows (positve and negative) over the entire life of an investment

NPV > 0 means worth pursuing bcs project expected to make more money than it costs

NPV < 0 means not worth pursuing bcs project expected to lose money. Costs outweigh future earnings

NPV = 0 means project will break even. Repays the investment and hits the discount rate but adds no extra profit

sharpe ratio

portfolio company

operating bizz in wihch a VC firm or PE fund or holding company owns an equity stake

Holding company

A holding company is a parent company that owns and oversees other businesses. Instead of making products or providing services, it focuses on managing subsidiary businesses and brands while maintaining control through its voting stock. This allows the parent company to exercise control without participating in day-to-day operations

Alphabet is a holding company taht owns Google eg