Capital Markets and Investment Banking Process Paper
Submitted in partial fulfillment of the
Requirements for FIN/402
University of Phoenix Online
January 19, 2009
Capital Markets and Investment Banking Process
Investment banking provides a service to our economy and serve an important role in the world financially. One important role is to help public and private companies raise capital. Investment banking is different from commercial banking in that it does not make commercial loans or take deposits. This paper will focus to describe the investment banking process including the function of portfolio construction, describe the factors that should be considered when selecting asset classes for an investment portfolio and describe the capital market instruments used in investment portfolio construction.
Investment banking consist of selling, underwriting, financial services, asset managing and trading securities. Investment banks cater to stockholders; nonprofit organizations and government agencies, which help them, raise funds on the capital market. Customers receive the following functions from investment banking: Trading intermediaries, invest and lend banks’ assets, advise on Mergers and Acquisitions and Buy, issue, sell and trade bonds and stocks.
At one point portfolios Investment banks were completely different from commercial banks, where people mainly sought commercial loans. In current years commercial and portfolio investment banks structures have become similar. The more services of investment banks are being offered through commercial banks now.
Depending on an Investor’s strategy Investors purchase securities to increase their portfolio. Numerous factors come into effect when constructing a portfolio, which include investment instruments and asset classes. In order to determine the proportion of fund to be distributed to different classes in a portfolio establishing...