Finals Fnm103
Finals Fnm103
Asset Management
Key Aspects of Asset Management
Type of Investment
Objective of Investment
Investment Banking and its four areas
Revenue in Investment Banking
Risk in Investment Banking
Asset Management
Asset management refers to the professional management of
investments, such as stocks, bonds, real estate, and other
assets, on behalf of individuals, institutions, or entities, to
achieve specific financial goals.
Asset managers, often in the form of asset management
companies or firms, provide services that include the
selection, purchase, and sale of various securities and other
assets, as well as portfolio monitoring and financial planning.
Asset management is
managing money with two
goals of: growing
investor’s money through
investment and mitigating
risk.
Key Aspects of Asset Management
1. Investment Planning: Asset managers assess the financial
goals, risk tolerance, and investment horizon of their
clients. Based on this analysis, they create tailored
investment plans.
2. Diversification: Asset managers diversify their clients'
portfolios by investing in a mix of asset classes, industries,
and geographic regions. Diversification helps spread risk
and enhance potential returns.
3. Portfolio Construction: Asset managers construct
portfolios based on the client's objectives. This process
involves selecting individual stocks, bonds, mutual funds,
exchange-traded funds (ETFs), real estate, or other
investment instruments.
2. External Risk Factor: it includes credit risk may may lead to defaults
on making payments or failure in paying the interest or repayment of
the principal. To avoid, the bank should grant loans to qualified
applicant with their rigorous assessment.
The Role of Investment Banks:
1. Underwriting
2. Merging and Acquisition
3. Merchant Banking
1. “Underwriting”: It is a process where bank raises capital for
their clients either corporation, government, or institution in
the form of stocks or debt instrument.