{"id":1575,"date":"2023-08-04T12:14:30","date_gmt":"2023-08-04T16:14:30","guid":{"rendered":"https:\/\/business.me.holycross.edu\/?p=1575"},"modified":"2023-08-04T12:14:30","modified_gmt":"2023-08-04T16:14:30","slug":"students-prepare-for-bank-visits-with-jargon-cheat-sheet","status":"publish","type":"post","link":"https:\/\/blogs.holycross.edu\/business\/2023\/08\/04\/students-prepare-for-bank-visits-with-jargon-cheat-sheet\/","title":{"rendered":"Students Prepare for Bank Visits with Jargon Cheat Sheet"},"content":{"rendered":"<p><span style=\"font-weight: 400\">\u00a0<a href=\"https:\/\/blogs.holycross.edu\/business\/wp-content\/uploads\/sites\/4\/2023\/08\/20151030-wall-street.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-1576\" src=\"https:\/\/blogs.holycross.edu\/business\/wp-content\/uploads\/sites\/4\/2023\/08\/20151030-wall-street.jpg\" alt=\"NYSE Wall Street Signs\" width=\"2426\" height=\"1403\" \/><\/a><\/span><\/p>\n<p><span style=\"font-weight: 400\">This list of finance vocabulary is a sampling of some of the terms and abbreviations students can expect to hear during conversations at the various site visits to banks in Boston and NYC as part of the Certificate in Finance &amp; Banking program.\u00a0 Get acquainted with industry <span style=\"color: #0000ff\"><a style=\"color: #0000ff\" href=\"https:\/\/youtu.be\/ZCFkWDdmXG8\">jargon and concepts<\/a><span style=\"color: #000000\">,<\/span> <span style=\"color: #000000\">and review <\/span><a style=\"color: #0000ff\" href=\"https:\/\/www.wallstreetprep.com\/free-resources\/\">courses and guides<\/a><\/span> to gain more from your upcoming experience, including the ability to ask better questions to make yourself stand out from the crowd.\u00a0 <\/span>Be sure to access the College&#8217;s <span style=\"color: #0000ff\"><a style=\"color: #0000ff\" href=\"https:\/\/www.holycross.edu\/campus-life\/clubs-organizations\/sga\/campus-life\/clubs-organizations\/sga\/sga-services\/readership-access\">free readership program<\/a><\/span> for the Wall Street Journal (WSJ) and New York Times (NYT) to connect with these terms in a real world context.<\/p>\n<p><em>Finance Jargon<\/em><\/p>\n<p><span style=\"font-weight: 400\">Asset: Resource with economic value that a corporation owns or controls with the expectation that it will provide a future benefit; Assets are reported on a company\u2019s balance sheet and are bought or created to increase a firm\u2019s value or benefit the firm\u2019s operations.<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li><span style=\"font-weight: 400\">Asset Allocation is an investment strategy that aims to balance risk and reward by apportioning <\/span><span style=\"font-weight: 400\">a portfolio\u2019s assets according to an individual\u2019s goals, risk tolerance, and investment horizon. The three main asset classes \u2013 equities, fixed-income, and cash and equivalents \u2013 have different levels of risk and return.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Book Building: Process by which an underwriter attempts to determine the price at which an initial public offering (IPO) will be offered. An underwriter, normally an investment bank, builds a book by inviting institutional investors (such as fund managers and others) to submit bids for the number of shares and the price(s) they would be willing to pay for them.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Book Value: Referring to an investment, it is the price paid for a security or debt investment. When a company sells stock, the selling price minus the book value is the capital gain or loss from the investment.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Broker: Individual or firm that acts as an intermediary between an investor and a securities exchange; <\/span><span style=\"font-weight: 400\">Buy and sell financial instruments on the behalf of a client and charges a fee for doing so.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Bull and Bear Markets:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">A Bull Market is a market that is on the rise and where the economy is sound. (Tip: A bull charges \u201cup\u201d with horns.)<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">A Bear Market exists in an economy that is receding, where most stocks are declining in value. (Tip: A bear charges \u201cdown\u201d with paws.)<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Buying Size: Occurs when a trader offers to buy a large volume of shares<\/span><\/p>\n<p><span style=\"font-weight: 400\">Buy-Side\/Sell-Side:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Buy-Side is the side of the financial market that buys and invests large portions of securities for the purpose of money or fund management; Includes investment managers, pension funds, and hedge funds.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Sell-Side is the other side of the financial market, which deals with the creation, promotion, and selling of traded securities to the public; Includes investment banks, advisory firms, and corporations.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><!--more--><\/p>\n<p><span style=\"font-weight: 400\">Capital Gains\/ Capital Loss:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Capital Gain is the profit one earns on the sale of an asset like stocks, bonds or real estate; Capital gain is the result when the selling price of an asset exceeds its purchase price.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Capital Loss is the loss that is incurred when the investment is sold; Capital loss is the result when the selling price of an asset is less than its purchase price.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Cash Out: Occurs when a firm runs out of cash and cannot readily sell marketable securities to raise cash; Firm must resort to borrowing.<\/span><\/p>\n<p>Commodities:\u00a0 A basic good used in commerce that is interchangeable with other goods of the same type. Commodities are most often used as inputs in the production of other goods or services. Thus, the term usually refers to a raw material used to manufacture finished goods, such as petrol or gold. A product, on the other hand, is the finished good sold to consumers.<\/p>\n<p>Corporate Social Responsibility (CSR): A management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.<\/p>\n<p><span style=\"font-weight: 400\">Crowding Out: Occurs when higher government spending fails to increase overall aggregate demand because higher government spending causes an equivalent fall in private sector spending and investment; Suggests rising public sector spending drives down private sector spending.<\/span><\/p>\n<p>Derivatives: Refers to a type of financial contract whose value is dependent on an underlying asset, group of assets, or benchmark. A derivative is set between two or more parties that can trade on an exchange or over-the-counter (OTC).<\/p>\n<p><span style=\"font-weight: 400\">Dow Jones Index: Stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Equity: Represents the shareholders\u2019 stake in a company, identified on a company\u2019s balance sheet; The calculation of equity is a company\u2019s total assets minus its total liabilities.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Escrow: Financial arrangement where a third party holds and regulates payment of the funds required for two parties involved in a given transaction; Helps make transactions more secure by keeping the payment in a secure escrow account which is only released when all of the terms of an agreement are met as overseen by the escrow company.<\/span><\/p>\n<p>Environmental, Social, and Governance (ESG):\u00a0 Set of aspects considered when investing in companies, that recommends taking environmental issues, social issues and corporate governance issues into account.<\/p>\n<p><span style=\"font-weight: 400\">Fallen Angel: A bond that was initially given an investment-grade rating but has since been reduced to junk bond status; Downgrade is caused by a deterioration in the financial condition of the issuer.<\/span><\/p>\n<p><span style=\"font-weight: 400\">FICO Score: Credit score created by the Fair Isaac Corporation (FICO); Lenders use borrowers\u2019 FICO scores along with other details on borrowers\u2019 credit reports to assess credit risk and determine whether to extend credit.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Financial Industry Regulatory Authority (FINRA): Independent, nongovernmental organization <\/span><span style=\"font-weight: 400\">that writes and enforces the rules governing registered brokers and broker-dealer firms in the United States; Both firms and individuals must be registered with FINRA to conduct securities transactions and business with the investing public. To become registered, securities professionals are required to pass qualification exams to demonstrate competence in their particular securities activities.<\/span><\/p>\n<p>Fixed Income: Those types of investment security that pay investors fixed interest or dividend payments until their maturity date. At maturity, investors are repaid the principal amount they had invested. Government and corporate bonds are the most common types of fixed-income products.<\/p>\n<p><span style=\"font-weight: 400\">Hedge: Investment position intended to offset potential losses or gains that may be incurred by a companion investment. Hedging against investment risk means strategically using financial instruments or market strategies to offset the risk of any adverse price movements.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Hunting Elephants: Practice of targeting large companies or customers to sell a good or service, as well as targeting large companies for acquisition.<\/span><\/p>\n<p><span style=\"color: #0000ff\"><span style=\"color: #000000\">Investing:<\/span> <\/span>\u00a0Deploying capital towards projects or activities that are expected to generate positive financial return over time.<\/p>\n<p><span style=\"font-weight: 400\">Leverage\/Levering Up: To increase the portion of debt in a firm\u2019s capital structure by issuing debt and using the proceeds to repurchase stock or by financing any new expansion through debt; Refers to the amount of debt a firm uses to finance assets.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Liabilities: Contractual obligations to pay cash or deliver other financial assets to other entities as a result of past transactions. Examples of Financial Liabilities include amounts payable for received goods or services, loans and interest, received prepayments for financial assets on sale.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Liquidity: Refers to how easily a company\u2019s assets can be converted into cash. Assets like stocks and bonds are very liquid since they can be converted to cash within days; Large assets such as property, plant, and equipment are not as easily converted to cash.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Loan: Credit type in which a sum of money is lent to another party in exchange for future repayment of the value or principal amount; Lender typically also adds interest and\/or finance charges to the principal value which the borrower must repay in addition to the principal balance.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Long\/Short Squeeze:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Long Squeeze occurs when a sudden drop in price of a stock or other asset incites further selling, pressuring long holders of the stock into selling their shares to protect against a dramatic loss.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Short Squeeze occurs when a stock or other asset jumps sharply higher, forcing traders who had bet that its price would fall, to buy it in order to forestall even greater losses; A short squeeze accelerates a stock\u2019s price rise as short-sellers bail out to cut their losses.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Maturity: The date on which the life of a transaction or financial instrument ends, after which it must either be renewed or it will cease to exist. The term is commonly used for deposits, foreign exchange spot trades, forward transactions, interest rate and commodity swaps, options, loans, and fixed income instruments such as bonds.<br \/>\n<\/span><\/p>\n<p><span style=\"font-weight: 400\">Merges &amp; Acquisitions (M&amp;A): The consolidation of companies or their major business assets through financial transactions between companies. A company may purchase and absorb another company outright, merge with it to create a new company, acquire some or all of its major assets, make a tender offer for its stock, or stage a hostile takeover. All are M&amp;A activities.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Nasdaq: Stock market index that measures the market capitalization-weighted index of over 2,500 common equities listed on the Nasdaq stock exchange; Nasdaq is also an exchange where investors can buy and sell stocks.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Net Worth: Value of the assets a person or corporation owns, minus the liabilities they owe Net worth is an important metric to gauge a company\u2019s health, providing a useful snapshot of <\/span><span style=\"font-weight: 400\">its current financial position.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Passive\/Active Management:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Passive Management is an investing strategy that tracks a market-weighted index or portfolio; Strategy of an investment fund of following a benchmark index to replicate the performance of the index or the broader market.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Active Management is a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark index or target return; Focused on outperforming the market.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Real Estate Investment Trust (REIT): Companies that own, operate or finance income-producing real estate across a range of property sectors; Stockholders of a REIT earn a share of the income produced through real estate investment \u2013 without actually having to go out and buy, manage or finance property.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Rebalancing: Process of realigning the weightings of a portfolio of assets; Involves periodically buying or selling assets in a portfolio to maintain an original or desired level of asset allocation or risk.<\/span><\/p>\n<p>Risk:\u00a0 The degree of uncertainty and\/or potential financial loss inherent in an investment decision. In general, as investment risks rise, investors seek higher returns to compensate themselves for taking such risks. Every saving and investment product has different risks and returns.<\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li>Risk Tolerance: is the degree of uncertainty that is acceptable to an organization or individual.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">S&amp;P 500: Stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States; One of the most commonly followed equity indices.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Securities and Exchange Commission (SEC): Independent federal regulatory agency tasked with protecting investors and capital, overseeing the stock market and proposing and enforcing federal securities laws.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Short Interest: Number of shares that have been sold short but have not yet been covered or closed out; Indicates the overall attitude of investors toward a particular security or financial market. An increase in short interest signals that investors have become more bearish, while a decrease in short interest signals they have become more bullish.<\/span><\/p>\n<p>Stock Market: is a constellation of marketplaces where securities like stocks and bonds are bought and sold. Stock markets provide you with easy, transparent access to investment assets, and they help professional investors determine fair prices for public companies.<\/p>\n<p><span style=\"font-weight: 400\">Stocks &amp; Bonds<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li><span style=\"font-weight: 400\">Stock: A single share of stock is a security that represents fractional ownership of the corporation in proportion to the total number of shares. This entitles the owner of the stock to a proportion of the corporation\u2019s assets and profits equal to how much stock they own. Stocks are bought and sold predominantly on stock exchanges and are the foundation of many individual investors\u2019 portfolios.<\/span><\/li>\n<li><span style=\"font-weight: 400\">Bond: Fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental); Used by companies, states, and governments to finance projects and operations.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Upside\/Downside:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none\">\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Upside refers to the potential increase in value, measured in monetary or percentage terms, of an investment.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Downside describes the negative movement of an economy, or the price of a security, sector, or market.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">The Upside\/Downside ratio is a market breadth indicator that shows the relationship between the volumes of advancing and declining issues on an exchange; Investors typically use the indicator to determine the momentum of the market at any given time.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">Valuation: Analytical process of determining the current (or projected) worth of an asset or a company; Analysts placing value on a company look at the business\u2019s management, the composition of its capital structure, the prospect of future earnings, and the market values of its assets.<\/span><\/p>\n<p><span style=\"font-weight: 400\">Vesting: Process by which an employee with a qualified retirement plan and\/or stock option becomes entitled to the benefits of ownership, even if he\/she no longer works at the company.<\/span><\/p>\n<p>For a more comprehensive list of financial terms,<span style=\"color: #0000ff\"> <a style=\"color: #0000ff\" href=\"https:\/\/www.spglobal.com\/marketintelligence\/en\/pages\/mi-glossary\">review the Market Intelligence Glossary from S&amp;P<\/a><\/span>.<\/p>\n<p><i><span style=\"font-weight: 400\">Please note: The terms defined in this document come from a variety of websites to include but not limited to: The Wall Street Journal, Investopedia, Business Insider, Financial-Dictionary, US News and The Raymond A. Mason School of Business. This is a sampling of terms and not an extensive list.\u00a0<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>\u00a0 This list of finance vocabulary is a sampling of some of the terms and abbreviations students can expect to hear during conversations at the various site visits to banks in Boston and NYC as part of the Certificate in Finance &amp; Banking program.\u00a0 Get acquainted with industry jargon and concepts, and review courses and &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/blogs.holycross.edu\/business\/2023\/08\/04\/students-prepare-for-bank-visits-with-jargon-cheat-sheet\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Students Prepare for Bank Visits with Jargon Cheat Sheet&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[18,38,39,49,78,181,185,227,266,369,370,428,449,484,491,514],"class_list":["post-1575","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-alumni","tag-bank","tag-banking","tag-boot-camp","tag-certificate","tag-finance","tag-firm","tag-holy-cross","tag-jargon","tag-prep","tag-prepare","tag-site-visit","tag-students","tag-tour","tag-vocabulary","tag-workshop"],"_links":{"self":[{"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/posts\/1575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/comments?post=1575"}],"version-history":[{"count":0,"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/posts\/1575\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/media?parent=1575"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/categories?post=1575"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.holycross.edu\/business\/wp-json\/wp\/v2\/tags?post=1575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}