FINC 356 8/24/36

Thirty practice flashcards in question and answer style based on Chapter 1 through Chapter 7 of the lecture transcript.

What organization's standards are followed for the structure of the equity research project?

The CFA Society

How many sections or chapters does an equity research report contain according to CFA Society standards?

Six sections or chapters

Which two client groups are described as interacting the most with investment banks on transactions?

Private equity and hedge funds

What types of institutions consume equity research?

Pension funds, insurance companies, sovereign wealth funds, commercial banks, and mutual funds

What is the key structural difference between a pitch deliverable and an investment report deliverable?

A pitch uses PowerPoint slides with charts and tables, whereas an investment report is formatted as a readable PDF with full text descriptions

What is the primary and largest revenue driver for global investment banks like Goldman Sachs?

Sales and trading, which accounts for 50\text{\null}\% or more of total revenues

What percentage of a global investment bank's total revenue stream is typically generated by investment banking?

Typically 20\text{\null}\% of revenues

What four revenue streams make up a typical universal investment bank model?

Sales and trading, investment banking, asset management, and commercial banking

Prior to what event was Goldman Sachs a pure investment bank without commercial banking operations?

The 2008 global financial crisis

By when must students select a publicly traded company to research for their project?

By the end of next week

Approximately how many publicly traded companies exist in the US and globally?

Between $4,000$ and $5,000$ in the US, and around $30,000$ globally

What is the current average Price-to-Earnings (P/E) ratio mentioned in the lecture?

Very close to $30$

What is the current average Price-to-Free Cash Flow ratio cited in the lecture?

Around $20$

What proportion of Wall Street research recommendations are buy recommendations versus sell recommendations?

About 90\text{\null}\% are buy recommendations, while only 5\text{\null}\% to 10\text{\null}\% are sell recommendations

What core activities are grouped under an investment bank's investment banking revenue stream?

Security issuance (issuing and underwriting stocks and bonds) and advisory work (M&A activity)

How does the lecture differentiate accounting profit from free cash flow?

Earnings represent accounting profit that accounts for items like amortization, while free cash flow represents the actual cash a business generates